P2P Financial Companies Will Be Able to Attract Institutional Investors Starting Next Year
Financial Services Commission Announces Measures to Ease Regulation on Online Investment Businesses
Expansion of Individual Investment Limits and Permission for External Platform Advertising
[Asia Economy Reporter Kwon Hyun-ji] Starting next year, the online investment-linked finance (P2P finance) industry is expected to be able to receive investments from financial institutions.
According to the industry, the Financial Services Commission held the 5th Financial Regulatory Innovation Meeting on the 20th and announced a plan to ease regulations on the online investment industry that includes this content.
The Financial Services Commission will allow financial institutions to access borrowers' personal identification information from each online investment company starting from the first quarter of next year. Until now, financial institutions could not invest because they were unable to know borrowers' real names, resident registration numbers, and other personal identification information. The specific method of providing personal identification information will be prepared in consultation with related organizations during the first quarter of next year. With the removal of investment obstacles, the online investment industry plans to actively attract institutional investors from next year to seek profitability.
Regulations related to individual investors' investments will also be eased. The current investment limit for individual investors in the online investment industry, which is capped at 30 million KRW, will be expanded. The industry expects this to be increased up to 50 million KRW as stipulated in the enforcement decree. This measure is expected to be implemented within the first half of next year.
Along with this, the business environment including advertising is also expected to improve. The Financial Services Commission decided to allow external platform advertising for the online investment industry starting from the first quarter of next year. Each online investment company will be able to attract investors not only through their own applications but also via platforms such as KakaoPay and Toss.
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Regarding these measures to revitalize the online investment industry, Lim Chae-yul, chairman of the Online Investment Association, said, “We are grateful that the Financial Services Commission has positively reviewed and proposed improvement plans for the difficulties the industry has continuously appealed for.” He added, “As the business environment improves, we hope that association members will engage in substantial competition to enhance the industry's credibility and faithfully fulfill their role as mid-interest loan institutions.”
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