Venture investment in unlisted stock and fractional investment distribution platforms (over-the-counter exchange) Start - Up companies is expected to be allowed.
The Ministry of SMEs and Startups (MSS) said on the 20th that it will pre-announce through administrative notice the revisions to the "Regulations on Registration of Individual Investment Associations and Issuance of Investment Confirmation," "Regulations on Registration and Management of Startup Planners," "Regulations on Registration and Management of Venture Investment Companies," and "Regulations on Registration and Management of Venture Investment Associations" until the 10th of next month.
The main point of this notice revision is to add unlisted stock and fractional investment distribution platforms to the exception category of financial companies using information and communications technology that are eligible for venture investment. Fractional investment is a method in which multiple investors jointly invest by splitting a high-priced asset, which is difficult for an individual to invest in alone, into equity units.
On the 9th, as the Enforcement Decree of the Financial Investment Services and Capital Markets Act was revised, unlisted stock and fractional investment distribution platforms were designated as innovative financial services. It determined that this field is recognized as distinct from existing financial services in terms of content, method, and form offered, and granted special regulatory exemptions.
Until now, venture investment companies and others were, in principle, prohibited under the MSS notice from investing in financial companies other than certain Fintech fields, raising concerns that venture investment in innovative financial service operators would be difficult.
The Ministry of SMEs and Startups (MSS) plans to establish an institutional foundation through this revision so that innovative financial Start - Up companies can continue to attract venture investment after being incorporated into the formal financial system.
Kim Bong-deok, venture policy director at the Ministry of SMEs and Startups (MSS), said, "We have reasonably reorganized regulations so that innovative financial Start - Up companies can continue to attract investment and grow," and added, "During the administrative notice period, we will gather a wide range of opinions, finalize the revision, and implement it promptly."