CD Yield to Take Effect as Key Indicator under Financial Transaction Indicators Act from Next Month 2
On the 25th, the Financial Services Commission announced that from October 2, a temporary holiday, the yield on Certificates of Deposit (CD) will take effect as a significant indicator under the Financial Transaction Indicators Act.
Previously, in March 2021, the Financial Services Commission designated the CD yield as a significant indicator under the Financial Transaction Indicators Act and selected the Korea Financial Investment Association as the institution responsible for calculating the CD yield significant indicator in June of this year.
With this enforcement, financial companies using the CD yield must provide general investors with an important indicator explanation document and explain its contents when entering into new contracts or renewing existing contracts starting October 2.
Since October 2 is designated as a temporary holiday, the Korea Financial Investment Association plans to calculate and disclose the CD yield using the improved calculation method starting from October 4.
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The Financial Services Commission and the Financial Supervisory Service plan to focus on guidance and consulting-based supervision for six months for institutions using the CD yield to ensure the improved CD yield is smoothly established in the market.
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