Nae Jae-cheol, Chairman of the Korea Financial Investment Association, "Support Tax System Including Strengthening Funding Supply Function and Abolishing Securities Transaction Tax"

by Oh Jooyean

Published 03 Jan.2021 16:27(KST)

"Efforts to Establish Capital Markets as a Major Investment Destination Surpassing Real Estate"

[Asia Economy Reporter Oh Ju-yeon] "In the post-COVID-19 era, the financial investment industry will take the lead in making a leap forward and ensuring that the capital market functions as a central growth engine of our economy."

On the 3rd, Na Jae-cheol, Chairman of the Korea Financial Investment Association, stated this while pledging to strengthen the capital market’s funding supply function for innovative growth, support a rational capital market taxation system, and strive to advance the retirement pension system in the Year of the Black Tiger.

Nae Jae-cheol, Chairman of the Korea Financial Investment Association, "Support Tax System Including Strengthening Funding Supply Function and Abolishing Securities Transaction Tax"

Chairman Na said, "It is highly likely that the COVID-19 situation will continue for a considerable period this year, and there are concerns about debt-driven financial risks due to low interest rates and high liquidity, so uncertainties in the economy and financial markets are expected to persist." He added, "Even in difficult circumstances, we must wisely overcome this crisis based on expertise and crisis management capabilities."

To strengthen the capital market’s funding supply function for innovative growth this year, Chairman Na announced plans to support funding supply and enhance the capabilities of investment banking (IB) services according to corporate growth stages, as well as to promote the establishment of a private placement bond market exclusively for professional investors.

He also added that they will support the establishment of capital market-friendly Environmental, Social, and Governance (ESG) systems and infrastructure, as well as the launch of ESG products by financial investment companies and related deal executions.

Above all, to ensure the success of the K-New Deal project, which aims for another leap forward in our economy, he emphasized that active support from our capital market will be provided through the revitalization of New Deal funds.

Furthermore, he expressed intentions to continue supporting rational improvements to the capital market taxation system, such as the abolition of securities transaction tax and tax benefits for long-term investments, and to strive for the advancement of the retirement pension system by introducing default options for retirement pensions and fund-type retirement pensions to improve pension returns for the public’s old-age security. To enhance investors’ financial investment capabilities, a financial investment understanding certification exam (Financial Investment Test) will also be promoted, allowing the general public to voluntarily test their financial investment skills.

Alongside this, restoring trust in the financial investment industry following last year’s private equity fund incident is identified as a task for next year.

Chairman Na said, "We will support the industry’s self-purification efforts," adding, "To this end, we will promote proactive risk management and rational improvements to the internal control systems of financial investment companies." He also plans to actively support the revitalization of public funds to increase the fund market’s contribution as a major means of household asset growth and investment for the public.

Chairman Na stated, "The boundaries between financial sectors are becoming increasingly blurred, and the entry of fintech and big tech into the financial industry is accelerating." He continued, "The financial investment industry will strive to launch new products that meet customer needs through continuous innovation and differentiation, improve services, and focus on preparing future growth engines through digitalization and globalization of the industry."

He went on to say, "Last year’s enthusiastic participation of the public in the capital market confirmed the growth potential of the capital market as a means of household asset growth, asset management, and investment." He expressed hope that "with the continued interest and participation of the public, the passion of the industry, and active support from financial authorities, the capital market will grow and advance further, establishing itself as a major investment target for our households, surpassing real estate."