Financial Authorities to Conduct Second Review Next Month
Over 80 Companies Seek Business Approval
Key Issue: 'Major Shareholder Eligibility'
[Asia Economy Reporter Kiho Sung] As financial authorities begin preparations for the second round of reviews for the Personal Credit Information Management Business (MyData) next month, attention is focused on whether Kakao Pay, which faced setbacks due to major shareholder eligibility issues, can be granted relief. The financial authorities are exploring various options, including contacting other institutions such as the People's Bank of China. Alongside this, they are expected to release their stance on situations where other financial companies might face similar circumstances as Kakao Pay.
According to the financial sector on the 29th, the financial authorities plan to announce the schedule for the second phase of 'MyData and other data industry licensing' after the Financial Services Commission's resolution on the 31st. Initially, the authorities intended to accept preliminary applications for the second licensing round within this month, but due to time taken to coordinate the review direction, it has been postponed to April.
During the first review, about 116 companies applied, with a total of 28 entities receiving licenses, including 14 financial institutions such as banks, card companies, and securities firms, and 14 fintech companies like Naver Financial and Toss. For this demand survey, over 80 companies have reportedly expressed their intention to enter the business.
The core issue in the second review is the eligibility of major shareholders. This is because major shareholder risks were particularly highlighted during the first review. Specifically, Kakao Pay applied for a preliminary MyData license review in December last year but failed to receive even preliminary approval due to incomplete submission of documents inquiring about sanctions from Chinese authorities against its second-largest shareholder, Alipay Singapore Holdings. The financial authorities' major shareholder eligibility review targets shareholders holding 10% or more of shares. Kakao Pay's shareholding structure is 56.1% by Kakao and 43.9% by Alipay, making it difficult to adjust shares for the main license review.
To pass the financial authorities' major shareholder eligibility review, it is necessary to confirm that Ant Group, the parent company of Alipay Singapore Holdings, has not been sanctioned by Chinese financial authorities. Although Kakao Pay submitted all related documents, the financial authorities withheld approval citing the lack of official documents from Chinese authorities. In other words, this case is complicated by friction between the Chinese government and local companies, regardless of fintech business capability or integrity.
As calls grow for urgent institutional reforms to prevent overseas authorities from controlling domestic licenses, the financial authorities have begun exploring various measures. They are also discussing alternatives for situations where overseas major shareholders affect domestic business licensing.
However, it is unlikely that a conclusion will be reached immediately. A Financial Services Commission official stated, "We are internally exploring various options regarding Kakao Pay, but since clear confirmation from Chinese authorities is necessary, a conclusion will not be reached within this month."
Meanwhile, attention is also on how other companies whose reviews were deferred due to major shareholder eligibility issues will respond. Hana Financial Group, excluded due to a prosecution investigation, is waiting for related institutional revisions and has recently begun preparations such as building IT systems related to MyData. Additionally, Hana Card, part of the same group, plans to collaborate with Busan City, NICE Information Service, the Financial Data Exchange, and Welcome Savings Bank, which has obtained a MyData license, to share technical know-how.
In contrast, Samsung Card, whose review was halted last December after its major shareholder Samsung Life Insurance received an 'institutional warning,' has suspended all related business activities until a decision is made by the financial authorities.
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