Featured Product

    FSC Announces New Legislation on Financial Benchmarks in South Korea

    October 31, 2019

    FSC announced the passing of the Financial Benchmark Act, which is a new bill to regulate financial benchmarks, in the National Assembly. The new legislation is intended to ensure the validity and credibility of financial benchmarks in response to global regulatory moves in which major countries, including EU, are introducing regulations on financial benchmarks. FSC expects that the Financial Benchmark Act will strengthen the management and supervision on financial benchmarks, which will help secure financial stability. The new legislation will take effect in November 2020. Meanwhile, the government will continue to work with EU for an approval that the new legislation is deemed equivalent to the Benchmarks Regulation in EU.

    The following are the key features of the new legislation: 

    • Designation of critical benchmarks—FSC may designate benchmarks that would have a significant impact on financial market stability, consumer protection, and the real economy as “critical” benchmarks.
    • Administrator of critical benchmarks—FSC may designate entities which determine, publish, and provide critical benchmark as administrators.
    • Obligations of administrator—Administrators are required to establish a committee to deliberate on important matters in regard with establishing and revising operational rules, collecting input data, and calculating and determining critical benchmarks. Administrators are also required to disclose details about operational rules and management of conflict of interest on their websites. Administrators should review the validity of their operational rules at least every two years and disclose the results.
    • Cessation of provision of critical benchmarks—Any administrator that intends to cease the provision of critical benchmarks for unexpected reasons shall post a public announcement on the reasons and the date of cessation for more than 20 days and report to the FSC six months before the date of cessation. FSC may order the transfer of such operations to other administrators or the continuation of such operations for a certain period of time not exceeding 24 months, if the cessation would have a significant impact on financial markets.
    • Obligations of users—Users of critical benchmarks shall provide a counterparty to a financial contract with written explanations on critical benchmarks.
    • Prohibition of distortion and manipulation—Contributors of input data and administrators are prohibited from engaging in distortion or manipulation of input data and benchmarks, in addition to other unlawful activities.
    • Inspection and punitive measures—FSC is to oversee compliance with the Financial Benchmark Act by administrators and may impose punitive measures against violations of laws such as administrative orders, punitive fines, and penalties.


    Related Link: Press Release (PDF)


    Keywords: Asia Pacific, Korea, Banking, Securities, Financial Benchmarks, Benchmarks Regulation, EU, Critical Benchmarks, Equivalence Regime, Interest Rate Benchmark, FSC

    Related Articles

    APRA Publishes Submission on Fintech and Regtech

    APRA published its submission, to the Senate Select Committee, on financial technology and regulatory technology.

    January 21, 2020 WebPage Regulatory News

    ECB Consults on Guideline on Threshold for Credit Obligations Past Due

    ECB published a draft guideline, along with the frequently asked questions (FAQs), on the definition of the materiality threshold for credit obligations past due for less significant institutions.

    January 20, 2020 WebPage Regulatory News

    BIS Discusses Role of Central Banks in Addressing Climate Change Risks

    BIS published a book that reviews ways of addressing the climate change risks within the financial stability mandate of central banks.

    January 19, 2020 WebPage Regulatory News

    FSB Report Examines Global Nonbank Financial Intermediation Activity

    FSB published the ninth annual report examining the global non-bank financial intermediation activity.

    January 19, 2020 WebPage Regulatory News

    OSFI Publishes Instruction Guide on Solvency Information Return

    OSFI published an instruction guide to assist administrators of pension plans in completing the Solvency Information Return that is required to be filed with OSFI.

    January 17, 2020 WebPage Regulatory News

    EU Amends IFRS 9 Rule, Changes Concern Interest Rate Benchmark Reforms

    EU published Regulation 2020/34 regarding the International Accounting Standard (IAS) 39 and International Financial Reporting Standards (IFRS) 7 and 9.

    January 16, 2020 WebPage Regulatory News

    FDIC and OCC Issue Statement on Heightened Cyber Security Risk

    In response to the heightened cyber-security risk facing the financial services industry and other critical business sectors, FDIC and OCC issued an interagency statement on heightened cyber-security risk.

    January 16, 2020 WebPage Regulatory News

    BCRA Updates Regulation on Capital Requirements and Information Regime

    BCRA updated the rules on minimum capital requirements for financial entities and on certain aspects of the information transparency regime for quarterly and annual supervision.

    January 16, 2020 WebPage Regulatory News

    BoE and FCA Outline Next Steps for LIBOR Transition in 2020

    BoE, FCA, and the Working Group on Sterling Risk-Free Reference Rates (RFRWG) have published a set of documents that outline the LIBOR transition priorities and milestones for 2020.

    January 16, 2020 WebPage Regulatory News

    BIS to Expand Central Bank Membership

    BIS is to expand its central bank membership base and to increase collaboration in its work as a forum for international cooperation and as a hub for central banks and other financial authorities.

    January 14, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4511