Korea Investment & Securities' integrated managed account (IMA) No. 1 product will be launched on the 18th.
According to the financial investment industry on the 17th, Korea Investment & Securities will be the first among comprehensive financial investment firms to unveil an IMA product. The subscription period runs from the 18th to the 23rd of this month, with the setup date on the 24th.
The first product being launched this time has a two-year maturity and offered a benchmark rate of return of 4% per year. At maturity, the principal is guaranteed by the securities firm, and if revenue exceeding the benchmark rate occurs, investors and Korea Investment & Securities split it 60-40. Korea Investment & Securities had initially considered a yield in the mid-3.5% range, but it is said to have raised it after rival Mirae Asset Securities was reported to be offering a rate in the 4% range.
The tax controversy over investment revenue, which had delayed the IMA launch, has been resolved. The Ministry of Economy and Finance and the Financial Services Commission (FSC) agreed to classify IMA revenue as dividends income rather than interest income. Accordingly, a 15.4% dividends income tax rate applies to IMA revenue.
An IMA is a product in which a large securities firm invests 70% or more of client-entrusted funds in corporate finance assets such as corporate bonds and acquisition finance loans to generate revenue. If held to maturity, the securities firm pays back the principal. It is a performance-dividends-type product whose yield varies with management results, and investors receive the contracted principal and revenue.
Earlier, the Financial Services Commission (FSC) held a regular meeting last month and designated Korea Investment & Securities and Mirae Asset Securities as comprehensive financial investment firms with equity capital of 8 trillion won or more. It is the first time in eight years since the IMA system was introduced.