South Korea: FSC proposes to ease restrictions on financial holding companies
Source: Asia Insurance Review | May 2025
The Financial Services Commission (FSC) has issued a preliminary notice of legislative changes regarding the Financial Holding Companies Act and its Enforcement Decree, with aims to facilitate synergetic effects in financial holding companies and unleash more agile responses amid changing external environments.
Financial conglomerates have been growing since the enactment of the Act in 2000. However, their growth in qualitative terms has remained inadequate due to investment regulations and ownership restrictions, said the FSC in a statement.
“With rapidly changing environments in the financial sector, such as digital transformation and the big blur phenomena, it has become increasingly crucial to seek regulatory reforms enabling financial holding companies to more agilely and effectively cope with these changes. In this regard, the FSC has held a series of taskforce meetings and seminars with relevant stakeholders and private sector experts to draw up plans to improve rules on financial holding companies,” the regulator said.
The key proposed amendments to the Act include:
- Raising financial holding companies’ investment limit to 15% of shares in investee FinTech companies from 5%
- Allowing FinTech subsidiaries’ ownership of own subsidiaries
- Easing group-wide work consignment approval and reporting rules
- Allowing private equity fund operations by financial groups’ grandchild subsidiaries
The draft amendments are open for public feedback from 14 April to 26 May. A