Law Would Open Finance Services Market

The Ministry of Finance and Economy announced yesterday that it is planning a “finance and investment business and capital market law” (tentative name), and if the law is passed by the National Assembly this year, it will go into effect starting 2008 after a one-year grace period.

If the law is passed, customers will be able to purchase all items related to stock, including stocks, futures, investment funds, and a variety of derivatives, from financial investment companies starting in 2008 at the earliest.

Financial investment companies will be allowed to perform all kinds of securities transactions as well. Existing securities companies, asset management companies and investment trust companies will also be allowed to incorporate into financial investment companies.

Customers will be encouraged to subscribe to a wide rage of investment items without the trouble of going to banks or securities companies because “door-to-door sales canvassers” will visit homes or offices just like insurance canvassers do.

“The core of the bill is drawn up in a way that will allow finance companies to freely work on a competitive system in the market,” said Finance and Economy Minister Han Duck-soo.

Salespeople will be responsible for fully explaining the investment risk and content of their investment products to customers. If they don’t, financial investment companies will cover their losses.

Do-Young Kim Sun-Woo Kim nirvana1@donga.com sublime@donga.com