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
    News

    EBA Publishes Phase 2 of Technical Package on Reporting Framework 2.10

    EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.

    July 10, 2020 WebPage Regulatory News
    News

    FASB Proposes to Delay Implementation of Insurance Contracts Standard

    FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).

    July 09, 2020 WebPage Regulatory News
    News

    APRA Updates Regulatory Approach to Loan Deferrals Amid COVID Crisis

    APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.

    July 09, 2020 WebPage Regulatory News
    News

    BCBS and FSB Set Out Recommendations for Benchmark Transition

    BCBS and FSB published a report on supervisory issues associated with benchmark transition.

    July 09, 2020 WebPage Regulatory News
    News

    IAIS Sets Out Recommendations for Benchmark Transition for Insurers

    IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.

    July 09, 2020 WebPage Regulatory News
    News

    ESMA Updates Reporting Manual on European Single Electronic Format

    ESMA updated the reporting manual on the European Single Electronic Format (ESEF).

    July 09, 2020 WebPage Regulatory News
    News

    EBA Calls on Resolution Authorities to Consider Impact of COVID Crisis

    EBA published a statement on resolution planning in light of the COVID-19 pandemic.

    July 09, 2020 WebPage Regulatory News
    News

    BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework

    BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework

    July 08, 2020 WebPage Regulatory News
    News

    ECB Guideline on Materiality Threshold for Credit Obligations Past Due

    ECB published a guideline (2020/97), in the Official Journal of European Union, on the definition of materiality threshold for credit obligations past due for less significant institutions.

    July 08, 2020 WebPage Regulatory News
    News

    FED Temporarily Revises FR Y-14 With Respect to PPP and CARES Act

    FED temporarily revised the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes in response to the COVID-19 pandemic.

    July 08, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5458