financial regulator-investment banks
Regulator to ease rules on IBs for more active role in corporate financing
SEOUL, April 9 (Yonhap) -- The financial regulator said Wednesday that it will revamp rules on investment banks (IBs) in order to encourage them to increase investments in smaller firms and risky but profitable assets.
According to the Financial Services Commission (FSC), IBs will be able to be actively involved in corporate restructuring and increase their exposure to smaller firms under eased regulations on credit line ceiling.
The FSC said IBs with capital base of 4 trillion won (US$ 2.69 billion) or more will be required to invest 25 percent of capital raised via commercial bill issuance in risky but profitable assets, such as low-rated firms and high-yield funds.
In contrast, their ceiling of investments funded through the sale of commercial bills in real estate will be gradually cut to 15 percent in 2026 and 10 percent the following year, from the current 30 percent.
The measures come as local IBs are largely focused on safe, low-yielding investments, such as real estate and others, according to the FSC.
The FSC said it will also assign IB licenses to more players by easing related regulations this year.
Details will be finalized later in the year, according to the regulator.
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