For public funds applicable to ordinary investors, the Amendment aims to build investor trust by improving the system to enhance profitability and reduce costs. For private funds applicable to professional investors, the Amendment aims to further increase autonomy and promote competition by reducing unnecessary regulations.
The Amendment also aims to make pragmatic improvements to the system by streamlining regulations concerning discretionary investment business entities and crowdfunding brokers, thereby addressing and improving upon a number of weaknesses that have emerged from the operation of the current system.
A. Reduce the frequency of notifying the trading details of financial investment instruments (Article 63, paragraph 1)
In the case of professional advisors for investment recommendation specified by the Presidential Decree for whom it is difficult to acquire important information that may influence investment decisions when performing his or her duties, reduce the frequency of notifying the financial investment business entity for which he or she works of the trading details of financial investment instruments on their own accounts from quarterly (current) to yearly.
B. Reduce the delivery frequency of asset management reports (Article 88, paragraph 1)
Reduce the delivery frequency of asset management reports by collective investment business entities from at least once every 3 months (current) to at least once every 6 months.
C. Official announcements on the operability and compensation system of fund managers (Article 91, paragraph 1)
Provide a legal basis to make official announcements on the operability and compensation system, etc., of the fund managers of collective investment property.
D. Prescribe an exception to the delivery of discretionary investment reports (Article 99, paragraph 1)
Prescribe an exception stating that a discretionary investment business entity is not required to deliver discretionary investment reports in cases specified by the Presidential Decree where an investor has expressly refused to receive discretionary investment reports or there is otherwise no risk of undermining investor profits.
E. Increase the investment scope of private equity funds (Article 249-12, paragraph 1)
Reduce the scope of prohibited securities from all equity securities (current) to equity securities with voting rights to enable private equity funds to invest in convertible preferred stocks and redeemable convertible preferred stocks.
F. Allow venture capital companies to establish and operate private equity funds specializing in start-up or venture business (Article 249-23, paragraphs 1 and 5)
Allow venture capital companies pursuant to the Support for Small and Medium Enterprise Establishment Act to establish and operate private equity funds specializing in start-up or venture business and prescribe that in such cases, matters concerning the current status of the management of collective investment property shall be reported to the Financial Services Commission and the Minister of SMEs and Startups.
G. Stipulate that any registration/registration for modifications filed by unlawful means shall be grounds for mandatory revocation (Article 253, paragraph 1; Article 282, paragraph 1)
Clearly specify in the Act that the cancelation or dissolution of a foreign fund shall be grounds for revocation of registration (currently stipulated in a lower statute), and prescribe mandatory revocation of the registration in such cases as well as cases where a registration or registration for modifications has been filed for a fund or foreign fund by false or other unlawful means.