The government plans to select up to two exchanges (distribution platforms) for fractional investment securities. Fractional investment refers to the process of liquidating real estate or music copyrights and selling them to multiple investors.
The Financial Services Commission noted on the 4th that it plans to proceed with the new licensing process for fractional investment distribution platforms as soon as it completes the amendments to the enforcement ordinance of the Capital Markets Act and related supervisory regulations. The amendment process is expected to be completed by the 25th, after which applications will be accepted for one month.
The Financial Services Commission decided to limit the new licenses to a maximum of two, considering that the fractional investment market is still in its early stages and its scale is not large, and that a proliferation of distribution platforms could lead to fragmented liquidity.
If there are multiple companies applying for the fractional investment distribution platform, the licensing review will be conducted in a bulk evaluation method through an external evaluation committee, similar to the case of internet-only banks and real estate trust licenses.
The detailed evaluation criteria and scoring will be finalized by the external evaluation committee, but the Financial Services Commission has proposed some bonus items. First, they decided to favor consortium approaches involving securities firms and fractional investment operators. The reason is that if multiple securities firms form a consortium, it is advantageous in terms of transaction support and securing investors.
They will also grant additional points to small and medium-sized specialized securities firms and to those with experience in operating fractional investment distribution platforms or a track record of system testing, enabling them to start services quickly.
The Financial Services Commission plans to hold an explanatory session regarding the licensing of fractional investment distribution platforms on the 18th at 10 a.m. in the auditorium on the second floor of the Financial Supervisory Service.