Copyright Royalty Claims Are 'Securities'... Musicow "Will Complete All Conditions Within Grace Period"

[Asia Economy Reporter Seungjin Lee] Musicow is restructuring its business following the review by the Securities and Futures Commission under the Financial Services Commission.

Musicow, a music copyright royalty participation claim investment platform, announced on the 20th, "To ensure a healthy trading environment and investor protection, we will promptly complete all standard requirements within the grace period based on the Securities and Futures Commission's review results."

On this day, the Securities and Futures Commission (hereinafter referred to as the SFC) held a regular meeting and determined that the music copyright royalty participation claims issued by Musicow fall under investment contract securities according to the Capital Markets Act.

However, the SFC took into account the following: ▲This is the first application case of investment contract securities under the Capital Markets Act, and Musicow's lack of awareness of illegality and low intent ▲Many investors are using the service, so suspension of the service could lead to unforeseen investor damage ▲The business is evaluated to contribute to diversifying funding methods for creators and revitalizing the copyright distribution industry. Therefore, the SFC granted a six-month grace period (until October 19) to change the current business structure to strengthen investor protection and report the results to the Financial Supervisory Service.

Accordingly, Musicow will not conduct new auctions starting April 21, 2022, to introduce services suitable for the new policy, and plans to resume copyright royalty participation claim auctions once the service restructuring is complete. Songs that were previously traded will continue to be supported for trading in the market, maintaining a stable service environment for users.

Musicow views the various institutional reforms and enhanced credibility policies as an opportunity for a new leap forward. Through this, it is expected to not only create a virtuous cycle in the domestic music copyright ecosystem but also strengthen expansion into overseas markets.

A Musicow representative stated, "We will quickly adapt to the new policies and systems, striving to grow more soundly as a service that protects investors and contributes to the activation of the music IP industry. We sincerely thank the financial authorities for providing the opportunity to prepare for the second act."

Meanwhile, Musicow has announced plans to introduce various systems to protect investor assets, including the introduction of real-name trading accounts, disclosure through the Electronic Disclosure System for Corporate Information, and the launch of an advisory committee. Recently, it also announced an accounting audit and recruited advisory members.

This content was produced with the assistance of AI translation services.