South Korea's Financial Services Commission (FSC) designated Korea Investment & Securities, Mirae Asset Securities and Kiwoom Securities as comprehensive financial investment business entities (CFIBEs) and outlined capital market rule changes designed to increase venture capital supply from CFIBEs offering investment management account (IMA) and promissory note services. Korea Investment & Securities and Mirae Asset Securities were designated at the KRW8 trillion minimum equity capital level, while Kiwoom Securities was designated at the KRW4 trillion level and additionally authorised to conduct short-term financing business. Under the revised rules, qualified CFIBEs will be required to supply venture capital equivalent to 25% of capital raised through promissory note and IMA services, with eligible forms including funding and equity investments in SMEs, middle-market enterprises and venture businesses, purchases of debt securities rated “A” or below, primary collateralised bond obligations, non-recourse receivables financing, and investments in venture capital and related vehicles. The regime also reduces the cap on managing promissory note and IMA funds in real estate assets from 30% to 10% in stages, expands prime brokerage scope to cover venture capital, new technology business cooperatives and real estate investment trusts, strengthens CFIBE designation criteria (including a two-year test for meeting equity thresholds and step-up eligibility from KRW3 trillion to KRW4 trillion and then KRW8 trillion at two-year intervals), and eases requirements for depositing foreign currency securities to support their use as collateral and for securities lending in overseas transactions. The cabinet-approved revisions to the Enforcement Decree of the Financial Investment Services and Capital Markets Act are set to take effect between 25 and 27 November 2025, alongside follow-on changes to subordinate rules. For compliance with the 25% venture capital supply duty, the FSC plans to apply an initial 30% recognition cap on investments in investment-grade bonds and middle-market enterprises via administrative guidance before seeking a formal rule amendment, and it signalled further CFIBE designations and the launch of a public-private consultative body by end-2025.
South Korea Financial Services Commission 2025-11-19
South Korea Financial Services Commission designates three securities firms as CFIBEs and introduces a 25% venture capital supply requirement
South Korea's Financial Services Commission designated Korea Investment & Securities, Mirae Asset Securities, and Kiwoom Securities as comprehensive financial investment business entities (CFIBEs) and introduced capital market rule changes to boost venture capital supply. CFIBEs must allocate 25% of capital raised to venture capital, with expanded prime brokerage scope and stricter criteria. Effective November 2025, changes include phased real estate asset management cap reductions and eased foreign currency securities requirements.