Kim Sewan, New Director of Capital Research Institute, Faces Challenge of 'Securing Budget'

December 2 Inauguration Ceremony Followed by Start of Work
Korea Exchange Still Has Unspent Budget for This Year

Yonhap News

Kim Sewan, the newly appointed president of the Korea Capital Market Institute, will hold an inauguration ceremony next month and officially begin his duties. Securing the budget, which has not been executed this year, is cited as the most urgent issue the new president must resolve.

According to the financial investment industry on the 25th, President Kim will hold a simple inauguration ceremony on December 2 and start work immediately.

President Kim faces the challenge of resolving this year's budget issue upon his inauguration. The Capital Market Institute was established in 1997 as a specialized research institution funded by the Korea Exchange, the Korea Financial Investment Association, and others.

Because of this, the Korea Exchange has been executing the budget for the Capital Market Institute under the name of "association fees." Until now, the Korea Exchange has recognized the association fees paid to the Capital Market Institute as expenses and has also received corporate tax benefits.

However, in April this year, the Busan National Tax Service claimed that the association fees paid to the Capital Market Institute this year are "non-designated donations" and began tax reassessments. The Korea Exchange is currently undergoing an appeal process against the tax reassessment by the Busan National Tax Service.

The Korea Exchange has not yet paid this year's budget to the Capital Market Institute. The budget is known to be about 3 billion KRW. This is because they judge that executing the budget under the name of association fees could lead to further tax reassessments.

The Capital Market Institute's budget is used for research, seminars, and other activities. Although the salaries of research fellows are being paid normally, concerns are growing inside and outside the institute due to the lack of budget execution this year.

Some view the tax reassessment as merely a pretext. A financial investment industry official explained, "The Korea Exchange requested the Capital Market Institute to dispatch PhD-level research fellows as advisors, but the request was rejected."

The Capital Market Institute is at the forefront of capital market policy research and actively conducts commissioned research for government policies. Given the current government's strong interest in capital market policies, it is expected that the new president will first focus on securing the budget after his inauguration.