Including targets for designation of financial complex companies such as Kyobo and Samsung

Major companies such as Kyobo Life Insurance, Samsung Life Insurance, Hyundai Motor Company, and Hanwha are designated as financial complexes from the end of June. When designated as a financial conglomerate, the related company shall specify matters related to internal control and risk management of affiliates and conduct regular risk management assessment. On the other hand, Kakao and Naver, whose total assets in non-core industries are less than 5 trillion won, are excluded from designation as a financial complex.

The Financial Services Commission announced on the 8th that it announced on the 8th that it would promulgate the enactment of the Enforcement Decree of the Act on Supervision of Financial Complex Business Groups from the 9th to the 19th of next month. The relevant laws and regulations are expected to take effect on June 30th.

The target of the financial complex business group designation is a group of companies with total assets of 5 trillion won or more and two or more financial businesses such as lending and receiving business, gold investment, and insurance business. For the stability of the application of the law, an enterprise designated as a financial conglomerate cannot be canceled within the range of three years.

However, △In case the total assets of non-major businesses (excluding those with the largest total assets among the lending and receiving business, financial investment business, and insurance business operated by a group of financial companies) are less than 5 trillion won △The assets of an actual financial company are financial complex An exception was made so that cases in excess of 50% of the total assets of the corporate group were excluded from the group designation.

According to the designation requirements, as of the end of 2019, there are six companies, including Kyobo, Mirae Asset, Samsung, Hanwha, Hyundai Motor Company, and DB.

In the future, these companies must report and disclose matters related to △ownership and governance △internal control and risk management △capital adequacy △internal transactions and risk concentration.

First of all, matters related to internal control and risk management of the financial complex should be specified, and a regular assessment of the status of risk management should be carried out. The internal control standards include procedures that employees of affiliated financial companies must follow in common, preparation of measures to prevent conflicts of interest that may occur in financial complexes, and establishment and operation of a dedicated internal control department.

Specific procedures and methods to manage risk at a single level, such as recognition, evaluation, and control methods for group-level risks, methods and procedures for allocating risk-bearing limits among affiliated financial companies, and establishment and operation of a department dedicated to risk management, should also be prepared. do.

In the event of problems with soundness, such as less than 100% of the capital adequacy ratio, a management improvement plan containing measures to increase financial soundness must be submitted. If the management improvement plan is insufficient or is not implemented, the Financial Services Commission stipulates that a request for amendment or supplementation and a request for implementation are made.

Kakao and Naver are excluded from the financial conglomerate group according to an exception. As of the end of last year, Kakao owns Kakao Bank, which has assets of KRW 23 trillion as of the end of last year, but Kakao Pay Securities (formerly Baro Investment & Securities), a non-core business, has assets of only 100 billion won. Naver currently operates only the electronic finance business, so it is not a business subject to the law, such as the lending/receiving business, financial investment business, and insurance business. Naver’s domestic financial assets are also less than 5 trillion won.

An official from the Financial Services Commission said, “The authorities for non-holding financial enterprises have been preparing related laws according to the point that management and supervision have been insufficient.” Said.