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Omission of Identification Confirmation on Currency Exchanges Under 1 Million Won

Omission of Identification Confirmation on Currency Exchanges Under 1 Million Won

Posted March. 31, 2005 23:49,   


From the second half of this year, when you exchange sums of money less than 1 million won, you don’t have to undergo identification confirmation through passports and other identification cards.

Additionally, starting from the fourth quarter (October to December) of this year, the margin of insurance discounts for accident-free drivers and premium increases for accident-prone drivers will be left to the discretion of the insurance companies. As a result, consumers will have a wider range of selection in purchasing insurance.

On March 31, to reform Korea’s financial environment for its development into the financial hub of Northeast Asia, the Ministry of Finance and Economy (MFE) has decided to relax 43 financial regulations before the end of this year.

The following are the principal regulations that will be alleviated.

Omission of Identification Confirmation When Exchanging Small Amounts of Money—

Starting this July at the earliest, when you exchange less than 1,000,000 won you do not need identification confirmation.

The MFE explained that it is currently in the process of revising the real-name financial transaction law ordinance and will be ready to institute the amendments by July.

Automobile Insurance Fees Expected to Decrease—

Non-life insurance companies are now allowed to determine the discount and premium increase margins on car insurance autonomously. Presently, the Korea Insurance Development Institute decides such margins based on the annual standards reported to the Financial Supervisory Service, and as a result nearly all car insurances have a similar discount and premium rate.

Domestic Investors Allowed to Join Foreign Company Equity Linked Securities—

Currently, investors may only hold Equity Linked Securities (ELS) issued in won or foreign currency ELSs issued by domestic companies. However, in the future, investors may acquire ELSs issued by foreign companies in foreign markets.

If this change takes place, investors may select foreign ELSs with higher returns than domestic ELSs.

Returns on Money Market Funds Expected to Rise—

Regulations concerning the operation of Money Market Funds (MMF) are also to be alleviated. In the future, MMFs with maturities of less than three months may be invested in Certified Deposits (CD) with maturities of less than one year. For the present they have be invested in those with maturities of less than six months.

Accordingly, the returns on MMFs are expected to increase.

Allowance of Bank Subsidiaries to Insurance Companies Possessing Industrial Capital Considered in the Mid to Long Term—

The government plans to decide on the schedule of alleviation of regulations for 32 mid- and long-term projects by 2007.

First, the allowing of insurance companies to take on bank subsidiaries that specialize in sales of insurance products and consumer loans (assure banking) is under consideration.

It will be considered whether to allow possession of up to 15 percent of the equity of bank subsidiaries by insurance companies that are affiliates of conglomerates, like Samsung Life Insurance. Currently, industrial capital may possess only up to four percent of a bank’s equity.

Additionally, decreasing the small-and-medium-business loan rate of domestic banks to the level of foreign bank branches and relaxing the regulations on speculation areas’ Loan to Value (LTV) rates are also under mid- to long-term consideration.

Chi-Young Shin higgledy@donga.com