Kiwoom Securities launched commercial paper on the 16th. Commercial paper is a product issued by a brokerage based on its own credit. Simply put, it is a certificate in which a brokerage borrows money from customers and promises to repay the principal and interest later.
Because commercial paper is not covered by the Depositor Protection Act, only large securities firms with more than 4 trillion won in equity capital that have been approved by the financial authorities can issue it. Kiwoom Securities obtained approval for commercial paper from the Financial Services Commission on the 19th of last month. In particular, about 25% of the funds raised through commercial paper must be invested in venture and innovative corporations and other risk capital by 2028.
"Kiwoom commercial paper" can be purchased as a demand account within one year (special rate, pre-tax annual 2.45%) or a term account (special rate, pre-tax annual 2.45%–3.45%). The minimum subscription amount is 1 million won. The total special issuance is about 300 billion won.
The first subscriber for the demand account is Korea Venture Capital Association Chairman Kim Hak-kyun. With nearly 30 years of experience managing risk capital, Kim said, "Risk capital is not just money, but capital that first believes in the potential of people and corporations," adding, "I hope commercial paper will now go beyond being a short-term revenue product to become the basic fuel for national growth."
The first subscriber for the term account is Song Seong-mun, captain of the Kiwoom Heroes. Song, who won the Golden Glove at third base in professional baseball this year, said, "Both baseball and investing are ultimately processes of making constant decisions amid uncertainty," adding, "Thinking that this commercial paper will become a starting point for other young challengers made it feel even more meaningful."
A Kiwoom Securities official said, "Funds raised through commercial paper will contribute to supplying growth capital needed for our economy, within the scope of maintaining short-term liquidity stability," adding, "Based on a risk management framework that places investor protection first, we will establish ourselves as a trusted comprehensive financial investment company."