FSS Holds Risk Management Workshop: "Strengthening Venture Capital Supply Capabilities of Securities Firms"

The Financial Supervisory Service held a workshop to strengthen risk management capabilities ahead of the expansion of venture capital supply by securities firms.

On November 17, the Financial Supervisory Service announced that it had held the "Risk Management Workshop for Corporate Credit Provision by Securities Firms" online via ZOOM, in cooperation with the industry. Approximately 150 professionals in charge of venture capital supply, corporate finance review, and post-management at securities firms attended the event.

This workshop was organized to provide each securities firm with an opportunity to assess its own risk management capabilities in preparation for the expansion of venture capital supply, including the additional designation of comprehensive financial investment business entities.

The Financial Supervisory Service explained the results of the "Risk Management Status Check for Corporate Credit Provision" conducted in the first half of this year for comprehensive financial investment business entities. The agency introduced cases requiring improvement, such as excessive reliance on the individual capabilities of investment officers for decision-making, and the lack of re-examination rights for Chief Risk Officers (CROs). It also shared concerns about potential conflicts of interest that may arise when note issuance operations and corporate finance work are managed within the same division.

Industry representatives shared practical experiences by presenting definitions of risk factors for each type of credit provision, such as acquisition finance, stock-secured loans, asset securitization, and bridge loans, as well as methods for conducting stress tests and utilizing key review checklists. They also introduced cases of building post-evaluation systems that reflect the characteristics of industries, borrowers, and collateral.

Recently, financial authorities have made it mandatory for comprehensive financial investment business entities to supply 25% of their funding as venture capital, making the selection and discovery of eligible investment destinations a major task. In line with this, IBK Industrial Bank of Korea presented its venture capital supply strategy based on its experience in financing small and venture businesses.

The Financial Supervisory Service stated, "We expect that sharing venture capital supply strategies and best practices in risk management through this workshop will strengthen the industry's venture capital supply capabilities," and added, "We will continue to communicate closely and actively cooperate to facilitate smooth venture capital supply and strengthen risk management capabilities at securities firms."

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