Financial Services Commission Designates 7 Companies Including Eugene Investment & Securities as Specialized Financial Firms for SMEs

[Asia Economy Reporter Lee Jung-yoon] The Financial Services Commission announced on the 3rd that it has designated a total of seven securities firms?Eugene Investment & Securities, Ebest Investment & Securities, Cape Investment & Securities, Korea Asset Investment & Securities, DS Investment & Securities, IBK Investment & Securities, and SK Securities?as specialized financial investment companies for small and medium-sized enterprises (SMEs).

In this selection, Cape Investment & Securities and DS Investment & Securities were newly designated. The Financial Services Commission designated these seven securities firms as specialized financial investment companies for SMEs after the previous designations expired, following application submissions and review by the SME Specialized Financial Investment Company Selection Committee from April to May this year.

Since April 2016, the Financial Services Commission has operated the specialized financial investment company system to promote venture capital supply by securities firms to small and venture businesses. Specialized financial investment companies for SMEs are designated every two years through evaluations by external experts, considering securities firms' performance in supporting small and venture businesses.

Specialized financial investment companies for SMEs receive incentives such as preferential selection as fund managers for SME and venture business support funds from the Korea Development Bank and Korea Growth Investment Corporation. They also benefit from preferential treatment when establishing separate operational funds and when being selected as lead managers for issuing securitization company guarantees (P-CBO) from the Korea Credit Guarantee Fund and the Korea Technology Finance Corporation. Additionally, they receive incentives such as preferential terms on securities-backed loans and credit loans?including limits, duration, and interest rates?from Korea Securities Finance Corporation.

Since the system's introduction, designated securities firms have demonstrated performance including supporting SME and venture business fundraising (approximately KRW 4.9 trillion) and fund management and direct investment (approximately KRW 2.5 trillion).

The Financial Services Commission stated, "We will establish minimum fundraising performance standards for specialized financial investment companies for SMEs and actively consider providing additional incentives to encourage improved performance. We will also clarify designation requirements and procedures to ensure that sound and capable securities firms can be designated as specialized financial investment companies for SMEs."

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