Reason for proposal and main contents

The current “Regulations on Financial Investment Business” require investment dealers or investment brokers (hereinafter referred to as “investment dealers, etc.”) to pay investors a fee for the use of money deposited by investors in connection with the purchase or sale of financial investment products or other transactions (hereinafter referred to as the “investor deposit fee”). It has been suggested that the imposition of new obligations on investment dealers is desirable by stipulating it in the Act.

On the other hand, securities firms have treated all of the interest income accrued from depositing their investors' subscription margin with a financial institution as their own revenue, without returning the margin to the investors, causing a controversy.

In this regard, the Board of Audit and Inspection has notified the financial supervision authorities that it is unreasonable to exclude the subscription margin deposited by the investors from those amounts payable as fees for the use of investors' deposits, since the Board believes that the subscription margin that individual or corporate investors deposit with a financial service institution as contract key money to purchase equity shares through an IPO or rights issuance definitely falls within the scope of investors’ deposits.

In response, the bill seeks to improve the statutory structure by directly stipulating in the Act the investment dealers' obligation to pay a fee for the use of investors' subscription deposits by providing the legal basis for investors to receive fees for the use of their subscription deposits, and by directly stipulating that the subscription deposit is included in the investor deposit (Newly established Article 74-2 of the draft).