The financial authorities have reorganized the comprehensive investment account (IMA) system, which had been neglected without detailed regulations for eight years. Based on this, they also indicated their intention to designate the first IMA operator and the fifth issuance bill operator in the second half of this year. They aim to invigorate our capital market and economy by increasing comprehensive financial investment operators (corporations) that will supply corporate finance and venture capital.
The issue is that the presidential election will be held again in June due to the impeachment of former President Yoon Suk Yeol. Securities firms are preparing to apply for comprehensive financial investment operators in line with this announcement, but they express concerns that policies may be thoroughly reconsidered or delayed once the new government is inaugurated.
On the 9th, the Financial Commission held a meeting with CEOs of 10 comprehensive financial investment corporations (corporations) at the Korea Financial Investment Association chaired by Chairman Kim Byeong-hwan and announced measures to enhance the competitiveness of corporate finance in the securities industry. At the meeting, the Financial Commission stated that it plans to accept applications for additional designations of comprehensive financial investment corporations in the third quarter of this year.
The comprehensive financial investment corporations have different allowed operations based on their capital size: 3 trillion won (corporate credit provision), 4 trillion won (issuance bill), and 8 trillion won (IMA). The government announced that it would accept applications for 4 trillion won and 8 trillion won comprehensive financial investment corporations in the second half of this year.
Currently, four securities firms in South Korea are engaged in the issuance bill business: Mirae Asset Securities, Korea Investment & Securities, NH Investment & Securities, and KB Securities. While there are securities firms looking to enter the business that have not started yet, such as Samsung Securities, Kiwoom Securities, Hana Securities, and MERITZ Securities. There are currently no IMA operators. The only firms with IMA eligibility (8 trillion won or more) are Mirae Asset Securities and Korea Investment & Securities.
Issuance bills are bills issued by securities firms based on their own credit with a maturity of less than one year and can be sold up to twice the amount of their capital. The issuance process is simple, and funding is relatively easy, which makes it advantageous for securing liquidity. The IMA involves securities firms loaning investor-deposited funds or investing them in corporate bonds, with the obligation to repay the principal, distributing any operational profits to investors later.
For securities firms, this represents a new opportunity to secure sources of income, so they have no choice but to seek to enter new businesses. All securities firms aiming to enter the issuance bill and IMA businesses are internally organizing dedicated teams and maintaining behind-the-scenes contact with financial authorities.
However, there remains a significant variable. The presidential election will be held in two months. Once the new president is inaugurated, not only the government organization but also the major policy directions of each ministry will undergo significant changes. Even if existing policies do not disappear, the transition of power and the appointment of key personnel will inevitably delay the implementation timeline.
Given this situation, securities firms are preparing but are skeptical about the prospects for designation within the year. A senior official from one securities firm noted, “Once the new regime is established, each ministry will reshape their work plans and report to the new president in turn,” adding, “Considering that entire process, the schedule proposed by the authorities to receive applications in the third quarter right after the presidential election and designate them within the year feels somewhat unrealistic.”