The super-sized investment bank (IB), which was launched for the purpose of revitalizing adventure capital, is drifting lame by the government authorities with lukewarm attitude. The Korean government`s original plan was to launch the super large IB project officially in October, but it has been delayed for more than five months after qualified applicants have applied for business rights. The Financial Supervisory Service and other financial authorities have pointed out that they are still under review and that they are only confusing the industry with a ‘rubber band’ without a clear screening criterion for selecting a business.

According to the financial industry on December 3, it was not clear whether the agenda was finalized at the last meeting of this year, scheduled to be held on December 13, after the financial committee`s Securities and Futures Commission announced last month that it would not issue a bill for issuance of short-

The Financial Authority, in November, granted large-scale IB business rights to five securities firms with capital stock of over KRW 4 trillion, including Mirae Asset Daewoo, Korea Investment & Securities, NH Investment & Securities, KB Securities and Samsung Securities and the Korea Investment & Securities Co., Ltd.

Last July, five securities firms with very large IB qualifications filed their application for authorization. Initially, according to the ultra-large IB development policy, it is expected that the legal examination period will be concluded within three months. However, as the review period was delayed, only five companies were designated as super large IBs only last month, and only one out of five companies issued the draft of the core business of large-scale IBs.

Meanwhile, the Financial Supervisory Service (FSS), which is in charge of the licensing business, is putting the position that "the examination is still in progress". There is no definite explanation as to which criteria are not met.

The bigger problem is that the audit is proceeding in accordance with the logic of the case, without providing clear authorization standards related to authorization of the issuing business such as financial institutions or financial institutions in charge of the licensing audit. Actually Samsung Securities has not held a share of Samsung Securities, but Samsung Securities has been putting all of its drafts into question because of its relationship with Samsung Life, which owns a stake in Samsung Securities. The rest of the companies are in a situation where they are in a situation where the major shareholder is qualified and the sanctions of the past financial authorities are a problem, why the examination is delayed, and the specific criteria related to the qualification issue. In particular, Korea Investment & Securities, the only issuer of issuance notes among the largest IB operators, has been raising the issue of equity with the rest of the companies as the existing private equity funds broke down and the issue of eligibility rushed.

The securities firms are having difficulties as the government originally decided to grant the super large IB business right to securities companies with certain qualification standards and delayed the screening of the SIF. In particular, as it becomes unclear whether the draft will be issued within the year, it is a major hurdle to establishing a business plan for next year.

An expert in the securities industry said, "We had to expand our own capital to over 4 trillion won in the big IB fund raising plan announced by the financial authorities in the early days. "It`s a big mess," he said. In addition, the official pointed out, "Since there are no clear standards in the eligibility screening beforehand, it is doubtful whether the authorities will pay dividends for each securities company."

By Kim Min Soo minsu@


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