Financial Supervisory Service Accepts Conversion Applications from Pseudo-Investment Advisory Firms to Investment Advisory Firms

August 14 Amendment to the Capital Markets Act
Strengthening Business Regulations on Similar Investment Advisory Firms

Financial Supervisory Service, Yeouido, Seoul. Photo by Younghan Heo younghan@

Starting from August 14 this year, two-way investment advice will only be allowed for investment advisory businesses, and the Financial Supervisory Service (FSS) will accept batch registration applications from quasi-investment advisory businesses wishing to convert to investment advisory businesses.

The FSS announced on the 8th that it will conduct batch registration reviews for quasi-investment advisory businesses wishing to convert to investment advisory businesses.

Quasi-investment advisory businesses seeking registration review should meet the registration requirements for investment advisory businesses and submit the investment advisory business registration application through the FSS website by May 13, three months before the law takes effect. However, registration applications will still be accepted after the application period, and in such cases, registration reviews will be conducted sequentially.

The registration requirements for investment advisory businesses under the Capital Markets Act include meeting the minimum capital requirements per business unit, having at least one full-time employee as an investment advisory personnel, and complying with the requirements under the Capital Markets Act and the Corporate Governance Act.

This measure is due to the amendment of the Capital Markets Act. To regulate improper business practices such as illegal leading room operations by quasi-investment advisory businesses, paid business activities using open chat rooms and YouTube will only be allowed for registered official investment advisory businesses starting from August 14.

The FSS stated, "Although the amendment to the Capital Markets Act was promulgated in February, there have been no registration applications for conversion from quasi-investment advisory businesses to investment advisory businesses so far. The FSS plans to re-announce the changes in the system to ensure smooth establishment of the system by the law enforcement date and conduct batch registration reviews for quasi-investment advisory businesses wishing to convert to investment advisory businesses."