South Korea's Ministry of Economy and Finance announced that the National Assembly has passed amendments to the Framework Act on Supporting Supply Chain Stabilization for Economic Security, expanding the Supply Chain Stabilization Fund’s investment channels and funding sources while adjusting rules for disposals of invested equity and the fund’s governance. The amendments broaden permitted indirect investments beyond collective investment schemes under capital markets law to include vehicles such as venture investment unions and new technology business investment unions, with the stated aim of increasing fund investment into small and medium-sized enterprises, startups and venture companies. They also create a legal basis for contributions to the fund from private companies and other non-government entities, diversifying funding sources that had been limited to items such as government-guaranteed fund bonds and contributions from the Export-Import Bank of Korea. When disposing of shares held by the fund, granting existing shareholders a pre-emptive right shifts from a mandatory requirement to a discretionary option, which the ministry linked to facilitating overseas equity investments to secure critical minerals. The Supply Chain Stabilization Committee’s membership is also expanded to reflect the creation of a planning and budget function. Separately, the ministry noted that the fund has established a KRW 1.5 trillion special support programme to respond to Middle East-related impacts, including support for alternative imports and emergency working capital. Measures include extending loan maturities by the period of the damage for existing supported firms, providing preferential interest rates of up to 2.3 percentage points for firms handling economic security items with high Middle East dependence, and shortening the support assessment process by up to three weeks.

Original source Back to tracker