"BDC Amendment Passed, Request to Partially Withdraw Retirement Pension"...Korea Financial Investment Association Proposes Regulatory Improvement to People Power Party

Kumtu협-Kookminuihim Policy Committee On-Site Meeting Held
Capital Market Chosen as First On-Site Meeting Topic
Proposals for Partial Withdrawal of Retirement Pensions and Easing of Deposit Discrimination Submitted

[Asia Economy Reporter Hwang Yoon-joo] The financial investment industry and the ruling party of the government gathered in one place to discuss regulatory improvements in the capital market. Various issues were raised at this meeting, including the prompt passage of the BDC (Business Development Company) amendment and partial withdrawal of retirement pensions.

The Korea Financial Investment Association held the 'People Power Party Policy Committee - Financial Investment Industry Field Meeting' on the morning of the 27th in the association's main conference room. Attendees included Seong Il-jong, chairman of the Policy Committee, Yoon Han-hong, secretary of the Political Affairs Committee, Hong Seok-jun, lawmaker, Yoon Chang-hyun, lawmaker, and other Policy Committee officials.

From the financial investment industry, CEO Na Jae-cheol of the Korea Financial Investment Association, along with representatives from eight securities companies, four asset management companies, and one real estate trust company, attended. From the financial authorities, Lee Yoon-soo, Director of the Capital Market Bureau at the Financial Services Commission, and Lee Kyung-sik, Deputy Director in charge of financial investment at the Financial Supervisory Service, were present.

◆ People Power Party Chooses 'Capital Market' for Its First Industry Field Meeting = This meeting was organized to listen to various on-site voices from the financial investment industry to revitalize the private sector-driven economy. Participants agreed on the need to improve capital market regulations to find solutions to the economic crisis and minimize the burden on the people's economy. In particular, they discussed and proposed various policy tasks such as innovative growth and support for the public's asset accumulation.

Na Jae-cheol, chairman of the Korea Financial Investment Association, first urged the prompt passage of the Capital Market Act amendment for the introduction of BDCs, recently submitted to the National Assembly. Chairman Na emphasized, "BDCs have played an important role as a means of funding venture and innovative companies in the past in the United States and the United Kingdom," and requested "active interest and support from the ruling party."

He also stated that efforts would be made to increase the public's asset accumulation and expand retirement income through the capital market in relation to the retirement pension default option implemented from this month.

Chairman Na said, "Currently, the income replacement rate of public pensions in Korea is only 31%, and although the private pension market such as retirement pensions is growing in size, it shows a low return rate of 1-2%. It is expected that default option products will be launched in earnest as early as October."

He added, "To systematically prepare for the public's financial needs throughout their life cycle, it is necessary to actively consider expanding the base of ‘Investment-type ISA’ (Individual Savings Account) and introducing ‘Junior ISA’," and urged, "We ask for active interest from the ruling party."

◆ Proposals for Partial Withdrawal of Retirement Pensions and Expansion of Overseas Bond Investment Ratio = Various opinions were raised during the closed-door industry opinion hearing session.

From the asset management side, there was a request to change the system to allow partial withdrawal of retirement pensions. Currently, it is not possible to receive only a portion when withdrawing retirement pensions early.

There was also a proposal to expand the current 30% limit on overseas bond investment to 100%, equal to domestic government bonds. This is due to increased demand for safe assets as the base interest rate rises. There was also a request to relax the 10% limit on equity investment in overseas public funds.

A CEO who attended the meeting said, "The atmosphere was open for free discussion," and added, "The Policy Committee showed a strong willingness to actively listen to opinions, and it was decided to hold a meeting at the working-level next time."

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