"Risk Increases with Scale of Promissory Notes and IMA Funding"... Financial Supervisory Service Urges Risk Management for Comprehensive Investment Firms

Funds Raised via Promissory Notes and IMAs Surge to 57 Trillion Won
Risk Increases as Firms Raise 1 to 2 Times Their Equity
"Credit Review Standards and Internal Controls Must Be Strengthened"

The Financial Supervisory Service has called on comprehensive financial investment business entities (so-called 'comprehensive investment firms' or 'Jongtusa'), among securities firms with over 3 trillion won in equity capital and designated by the Financial Services Commission, to strengthen risk management of assets under management and internal controls in order to protect investors. This request comes as these comprehensive investment firms are actively supplying venture capital through products such as promissory notes and integrated investment accounts (IMA), which can increase risks such as liquidity risk.

The Financial Supervisory Service announced on April 21, 2026, that it held a 'C-level Executive Meeting on Securities Firms’ Promissory Notes and IMA Businesses' at its Yeouido headquarters in Seoul, addressing these issues.

Seo Jaewan, Deputy Governor of the Financial Supervisory Service, stated, “As capital raising for the supply of venture capital through promissory notes and IMAs gains momentum, the role of comprehensive investment firms is becoming increasingly important. These firms must establish systems to support the growth of innovative and venture companies by identifying those with potential, while ensuring there is no negligence in investor protection and risk management.”

Comprehensive investment firms are permitted to handle promissory notes if they have at least 4 trillion won in equity capital, and IMAs if they have at least 8 trillion won. Funds raised through promissory notes and IMAs are mainly used for corporate finance, thereby serving to activate the supply of venture capital.

However, while investors are protected by the credit of the securities firm, they are not covered by the Depositor Protection Act. Given that the issuance of promissory notes can be up to 200% of equity capital and IMAs up to 100%, the risks increase as the scale of these products grows. The amount raised through promissory notes surged from 15.6 trillion won at the end of 2020 to 54.4 trillion won as of last month, and IMAs increased sharply from 1.2 trillion won at the end of last year to 2.8 trillion won at the end of last month.

On this day, Deputy Governor Seo emphasized the importance of risk management for promissory notes and IMAs. He said, “Strengthen liquidity management of assets managed through promissory notes to ensure the ability to respond under stress scenarios, and for IMAs, review asset liquidity in advance to prevent any issues with clients withdrawing funds before maturity.”

The Financial Supervisory Service also plans to establish 'Best Practices for Corporate Credit Provision' to enhance the corporate finance review capabilities of comprehensive investment firms. Through these measures, the aim is to improve credit risk management and support the development of a robust investor protection system.

There was also a call to strengthen internal controls. Deputy Governor Seo said, “For the continued growth of promissory notes and the successful establishment of IMAs, comprehensive investment firms must regularly review, with a focus on audit departments, the appropriateness of operations and the effectiveness of investor protection mechanisms.”

Regarding concerns about potentially troubled overseas private debt funds, he emphasized the need to establish response protocols. Deputy Governor Seo said, “Firms should actively communicate with overseas asset managers, quickly grasp trends in fund redemption and loss size, promptly inform investors, and analyze the soundness by industry and liquidity risks of overseas private debt funds to prepare for the possibility of risk events.”

The Financial Supervisory Service intends to identify potential risk factors in promissory notes and IMAs and pursue necessary institutional improvements. Through these efforts, it aims to help promissory notes and IMAs become valuable investment vehicles for the public.

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