South Korea

초대형 IB, 2028년까지 모험자본 25% 공급 의무

ET News | Local Language | News | July 16, 2025 | UndeterminedBizdev-Partnering

The Financial Services Commission (FSC) has mandated that ultra-large investment banks (General Investment Companies) increase their venture capital supply ratio to 25% by 2028. This ratio will rise progressively from 10% in 2026 to 20% in 2027 and reach 25% in 2028. Meanwhile, the management limit for real estate-related assets will be reduced from 15% next year to 10% in 2027. These measures apply immediately to Investment Management Accounts (IMA), which currently have no operations.

The FSC is strengthening risk management by setting combined fund raising limits through IMA and promissory notes at 300% of equity capital, with a 200% cap specifically for promissory notes. Both products are classified under the Financial Consumer Protection Act, triggering suitability obligations and risk disclosure requirements. IMAs must be primarily principal-guaranteed, with at least 70% having maturities of one year or more. Additional investor protections include restrictions on self-trading, 5% seeding investments, regular operational notifications, and mandatory loss reserves of at least 5% of principal to ensure principal repayment continuity.

Designation requirements for general investment companies will tighten, including equity capital thresholds sustained over the last two fiscal years, evaluations of business plans and social credibility, and staged operational durations correlating with asset size growth. New major shareholder approval criteria will be introduced for companies managing assets exceeding 8 trillion KRW, alongside the formation of external evaluation committees.

The revision also allows securities firms greater flexibility by removing the requirement for concentrated deposits of proprietary foreign currency securities, permitting their use as collateral or for borrowing. Internal lending between securities firms involving derivative-linked securities and proprietary assets will be capped at 10%. Securities lending brokerage businesses will face new professional staffing requirements, including specialists in trading execution and IT, to support automated multi-party transaction processes.

Overall, these regulatory changes aim to redirect funds from real estate toward productive financing sectors such as venture capital, fostering new growth industries and enhancing capital market dynamism by empowering securities firms to better support innovative enterprises.

KAMA "PBV 차세대 플랫폼 될 것…정부 정책 나서야"

ZD Net Korea | Local Language | News | July 16, 2025 | Regulation

The Korea Automobile Mobility Industry Association (KAMA) released a report emphasizing the need for government policy support to expand the market for Purpose-Built Vehicles (PBVs) and light commercial electric vehicles (EVs). The report highlights that in 2024, global sales of light commercial EVs reached about 660,000 units, a 40% increase from the previous year, with China leading the market at 450,000 units. Europe saw a 10% decline to 117,000 units, while South Korea’s domestic sales dropped 52% to 21,000 units due to limitations such as short driving range and inadequate charging infrastructure.

South Korean manufacturers are responding by launching new PBV models; Hyundai plans to release a modular commercial vehicle platform "ST1" in 2024, KG Mobility introduced the "Musso EV" pickup, and Kia unveiled the dedicated PBV platform "PV5." Internationally, Europe is developing platforms like "Plexus" for electric vans, and China's CATL introduced the "Kunse" light commercial EV platform equipped with proprietary batteries.

KAMA underscores three key reasons for expanding the PBV market: environmental benefits because light commercial vehicles contribute disproportionately to carbon emissions and urban air pollution; economic competitiveness as electric commercial vehicles are becoming cost-effective in total ownership costs; and growing demand from major logistics firms and customized mobility solutions for vulnerable groups.

KAMA Chairman Kang Nam-hoon highlighted PBVs as next-generation platforms that will integrate autonomous driving and support diverse applications like unmanned delivery and shuttles. He called for government incentives for domestic PBV production and the establishment of charging infrastructure at strategic locations such as logistics centers, welfare facilities, and educational institutions to sustain the domestic manufacturing base and activate the market.

Chosun Ilbo | English | News | July 16, 2025 | Regulation

China is expanding its export controls to cover more than 2,000 mineral items, including rare earth elements, as part of a strategic overhaul of its mineral export system. This reassessment, led by the Ministry of Commerce (MOFCOM), began in April and targets not only minerals already under export restrictions but also related components, compounds, and technology products. The move follows prior restrictions on 12 rare earth and strategic minerals earlier this year and an expansion of dual-use items under control last year, marking the most significant revision of China's mineral export controls in 15 years.

The new system introduces tighter central oversight and extensive tracking of every stage of mineral production, with MOFCOM having full authority over exports of dual-use goods, including minerals. The revised controls now include critical materials for electric vehicles, batteries, and high-tech industries. Since April, China has imposed export controls on seven heavy rare earth elements vital to advanced technology and defense, many of which it predominantly mines and refines domestically. Exporters are increasingly facing delays and sudden customs halts, often requiring official approval from MOFCOM, even for products not formally on the control list.

These measures have disrupted supply chains, particularly affecting South Korean electronics and heavy equipment makers. Some common metal products like titanium rods and zirconium tubes have also experienced clearance delays. Experts see this mineral export control expansion as a response to U.S. restrictions on semiconductors, AI, and battery technologies. China controls about 70% of global rare earth production and 92% of processing, making it a dominant player in this strategic supply chain. Unlike during the 2010 trade tensions with Japan, when export controls were undermined by smuggling, China now aims to build a comprehensive national system to eliminate illegal mining and enforce stricter centralized oversight.