Financial Investment Services and Capital Markets Act
The Financial Investment Services and Capital Markets Act governs the regulation of securities markets and financial instruments in South Korea. Enacted in 2007, the Act consolidated and modernised previous securities legislation. The Act establishes the regulatory framework for securities offerings, trading, disclosure requirements, and the regulation of financial investment businesses. The Financial Services Commission and the Financial Supervisory Service are responsible for enforcement.
Legal area: Law governing the issuance and trading of securities and financial instruments.
Year enacted: 2007
Key Provisions
- Chapter I: General provisions (securities, financial instruments)
- Chapter II: Securities offerings (prospectus, disclosure)
- Chapter III: Securities trading (market regulation, insider trading)
- Chapter IV: Financial investment businesses (registration, conduct rules)
- Chapter V: Derivatives (clearing, margin requirements)
- Chapter VI: Disclosure (periodic reports, major shareholder reports)
- Chapter VII: Supervision and enforcement
Significance
The Financial Investment Services and Capital Markets Act modernised South Korea’s securities regulation framework. The Act has been amended to address market manipulation, insider trading, and the regulation of fintech. South Korea’s capital markets have grown significantly, with the Korea Exchange being one of Asia’s major stock exchanges. The Act’s disclosure requirements have improved transparency. The Act has been updated to address digital securities and the regulation of cryptocurrency exchanges.