FSC Announces Guidelines for Exclusive Operational Rights of Innovative Financial Businesses

Guidelines Announced for Full Implementation of Exclusive Operational Rights

The Financial Services Commission announced on June 25 that it had reported the "Guidelines for Exclusive Operational Rights of Innovative Financial Businesses," which detail the specific operational standards and procedures for exclusive operational rights, at the 12th regular meeting of the Financial Services Commission.

Exclusive operational rights are a system that grants a certain period of priority to businesses operating innovative financial services that have obtained licenses or approvals to transition into official financial businesses under relevant financial laws, thereby supporting their stable settlement in the financial market. Until now, various financial services have undergone regulatory improvements based on empirical evidence through the financial regulatory sandbox, and as a result, some innovative businesses have completed the empirical stage and are actively preparing to apply for official licenses or approvals.

The new guidelines include specific requirements for the occurrence of exclusive operational rights, procedures and standards for calculating the duration of such rights, the scope of occurrence, disclosure systems, and requirements for protection measures in the event of infringement.

Innovative financial businesses seeking exclusive operational rights must obtain licenses, permits, or approvals before the expiration of their designated period. If the service was not launched at the time of application for a license or if the application was made after the expiration of the designated period, resulting in the loss of designation, exclusive operational rights will not be granted.

The duration of exclusive operational rights is determined by the Financial Services Commission, within a maximum of two years from the date of licensing, following deliberation by the dedicated subcommittee and the main committee of the Innovative Finance Review Committee.

If a business's exclusive operational rights are infringed, it may request protection measures from the Financial Services Commission. The dedicated subcommittee and the main committee of the Innovative Finance Review Committee will review the case, and the Financial Services Commission will make a final decision on whether infringement occurred and whether to issue corrective or suspension orders, which will then be notified. If corrective or suspension orders are not complied with, an administrative fine of up to 10 million won will be imposed under the Financial Innovation Act. The guidelines take effect from June 25 and will also apply to businesses that met the requirements for exclusive operational rights and applied for licenses before the implementation of the guidelines.