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

    UK Authorities Consult on Implementation of Basel 3.1 Standards

    The UK authorities have published consultations with respect to the Basel requirements for banks. The Prudential Regulation Authority (PRA) published the consultation paper CP16/22 on rules for the implementation of Basel 3.1 standards.

    November 30, 2022 WebPage Regulatory News
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    FSB and NGFS Publish Initial Findings from Climate Scenario Analyses

    The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.

    November 15, 2022 WebPage Regulatory News
    News

    FSB Issues Reports on NBFI and Liquidity in Government Bonds

    The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.

    November 14, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    EU Finalizes Rules Under Crowdfunding Service Providers Regulation

    The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.

    November 08, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8597