On November 28, 2022, the Financial Supervisory Service (the “FSS”) announced plans to improve the speed, transparency and predictability of the licensing application process in response to the feedback from applicants identified in the course of consultations.
We set out below details of the revamped financial licenses application process announced by the FSS.
Establishment of START Portal System for Online Applications and Management of Prior Consultations
1. Establishment of the START portal system
The FSS has operated a “prior consultation” stage for prospective new entrants to the Korean financial market and has advised prospective applicants on the legal requirements, procedures and other relevant issues for new license applications prior to formal commencement of the license/permit application process.
Going forward, the FSS will establish an online system for pre-consultation (START) to enable applicants to (i) apply for pre-consultation and monitor the progress of the pre-consultation discussions through the new online platform rather than by phone (as done previously), and (ii) receive notices via text messages on the assigned FSS officer to be in charge of the pre-consultation discussions and the meeting schedule.
2. Revision of the license application manual
In consideration of the applicants’ needs, the FSS will update the license application manual by adding a section on FAQs and incorporating relevant interpretive rulings and pertinent precedents.
Expediting Registration of New Technology Venture Capital Companies through Improved Review Process
1. Prompt consultations on registration of new technology venture capital companies
The FSS will (i) promptly conduct pre-consultations for registration of new businesses upon the applicant’s request and (ii) provide detailed guidance on the documents and requirements for registration under applicable laws and regulations, and (iii) other pertinent matters to be considered for the new business registration.
2. Provision of FAQs on new business registrations and operation of new technology venture capital companies
FAQs on the registration and operation of new technology venture capital companies will be provided and incorporated into the licensing/registration manual and posted on the FSS website.
3. Implementation of a new Quick-Review process during the pre-consultation phase
The FSS will adopt a new process under which the assigned FSS officer for the new business registration will first conduct a “Quick Review” of the registration documents for immediate feedback to the applicant. Formal receipt of the registration documents and review will take place once the FSS officer determines the registration documents are fully prepared through Quick-Review process, however, where the registration documents require minor supplements, the FSS will formally register the receipt of the registration documents and commence review in parallel to the registration package being supplemented.
4. Enhancements in the predictability of the outcome of the new business registration
The FSS will regularly inform applicants of (i) the progress of review for registration of the new business entity (document filing, results of inquiries, application review, and completion of registration) throughout the registration review process and (ii) the expected timing of completion of registration at the stage of the Quick Review process.
Shortening of the Review Period for Foreign Fund Registration System and General Private Fund Reporting System
1. Implementation of a new system for registration and management of foreign funds
By developing a new “Foreign Fund Registration and Management System,” the process of registering foreign funds will be automated with a view to (i) enhancing transparency in the review criteria and progress of the review and thereby improving the predictability of the outcome of the registration and (ii) enabling quick turnaround time by restructuring the application criteria around key items.
2. Revamping of general private fund reporting system
The FSS will reorganize the “General Fund Reporting System” to focus on essential matters for reporting and direct efforts to minimize input errors at the reporting stage.
Shortening the Pre-consultation Period for New Financial Products and Enhancing Transparency
1. Enable prompt review by the establishment of a one-stop consultative committee
A one-stop consultative committee for new product review will be formed to make assessments on new products that require review by multiple teams at the FSS. The new committee will assign the application review to the most relevant team and determine the review process (e.g., interval review by the relevant FSS team or through guidance from relevant government agencies such as the Financial Services Commission) within five business days of receipt of the application.
2. Provide detailed status of review by phase
The process of reviewing standardized terms for new products to be sent to customers will be revamped such that the applicants will be provided with detailed information on the request for additional documents and the FSS’s relevant review status (e.g., review by the team in charge or review by the legal team.)
3. Improve the turnaround time for new product reviews by effective assignment
Officers with expertise in the relevant product and experience in new product reviews will be assigned for review of new products so as to improve the turnaround time.
