Financial Supervisory Service Rationalizes Calculation System for Securities Firms' Deposit Fee Rates and More

[Asia Economy Reporter Lee Jung-yoon] The Financial Supervisory Service (FSS) announced on the 21st that it will rationalize the calculation system for securities firms' deposit utilization rates, stock lending fee rates, and credit loan interest rates, and improve the disclosure methods.

There have been ongoing concerns about the appropriateness of interest and fee rate calculations related to individual investors' financial investment product transactions. The FSS explained that this is because securities firms do not reflect changes in market conditions such as the base interest rate when calculating deposit utilization rates and credit loan interest rates, or because stock lending fee rates are not disclosed, which is considered to weaken investor protection.

Accordingly, the FSS plans to improve the calculation standards so that investors' deposit utilization fees can be reasonably calculated and paid, and to establish unified disclosure standards. This includes clarifying the fee inspection cycle and preparing disclosure forms for calculation standards and payment timing. Although the average deposit utilization rate increased from 0.18% at the end of 2020 to 0.37% at the end of last year, it is judged that some securities firms have not adequately reflected the base interest rate hikes.

The FSS is also reviewing and promoting improvements in the payment methods for stock lending fee rates and the disclosure of fee rates by securities firm and investor type. Furthermore, although negotiable certificate of deposit (CD) rates have recently declined, some securities firms' credit loan interest rates continue to rise, so the FSS plans to review the calculation system for credit loan interest rates borne by investors and strengthen the disclosure of credit loan interest rates.

An FSS official stated, "Starting from March this year, we plan to form a task force (TF) with related organizations to comprehensively review the practices of imposing and paying interest and fee rates," adding, "Through these improvements, we will ensure that interest and fee rates related to individual investors' financial investment product transactions are reasonably calculated and paid."

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