[why&next] Confused Securities Firms "Which Beat Should We Follow..."

[Asia Economy Reporters Junho Hwang, Myunghwan Lee] "First, the amendment bill including the financial investment tax must be passed before we can provide guidance on the corresponding strategies. It seems that a postponement is currently being considered, but no final decision has been made yet."

On the 23rd, the WM (Wealth Management) center of a securities firm located in Gangnam, Seoul, provided this guidance regarding the introduction of the financial investment tax. Although the implementation of the financial investment tax is imminent, securities firms responsible for withholding the tax are hesitating and looking only to the National Assembly as the gap between the ruling and opposition parties remains unresolved.

The private banker (PB) team leader at this WM center said, "Regardless of asset size, many clients are asking whether the tax burden will increase or decrease assuming the introduction of the financial investment tax, but it is difficult to explain. We are only saying, 'It is hard to provide guidance because the bill has not been finalized yet.'"

This is not limited to this securities firm. Most large securities firms have instructed their PBs to respond once the bill is passed. A representative from a major securities firm explained, "Only after a decision is made will PBs contact high-net-worth clients and take action."

An industry insider from the financial investment sector analyzed, "Typically, when a new system is introduced, PBs assess the impact on investors' assets, prepare response strategies in advance, provide guidance, and recommend suitable products. However, in the case of the financial investment tax, due to intense controversy, it seems they have decided to wait for the outcome before taking action."

Not only PBs but also the system overhaul side is in the same situation. Once the financial investment tax is introduced, securities firms must verify investors' transaction details through their IT systems and withhold the tax twice a year, in January and July. System upgrades are necessary for this, but despite the system itself being established in 2020, most securities firms appear to have done nothing.

A representative from a securities firm stated, "Even if the law is passed, enforcement rules and other details must be issued, and accordingly, IT systems must be developed or products prepared, so we are watching the situation in the National Assembly."