Seoul: The Financial Services Commission (FSC) on Wednesday granted a license to NH Investment and Securities Co. to operate investment management accounts (IMAs), marking a significant step for the brokerage firm to broaden its business portfolio and enhance its asset base.
According to Yonhap News Agency, the IMA scheme, introduced in 2017, provides an opportunity for brokerages to augment assets under management and amass more funds under relaxed regulations. Last November, Mirae Asset Securities and Korea Investment and Securities were similarly licensed for IMA operations. The regulatory framework allows IMA operators to raise funding of up to 300 percent of their capital base by issuing commercial papers.
IMA-operating brokerages are also mandated to invest a minimum of 25 percent of IMA deposits and funds raised through commercial paper issuance in high-tech sectors deemed promising, as per the FSC. This initiative aligns with financial authorities' objectives to cultivate large-scale, homegrown investment banks (IBs) modeled after Goldman Sachs.
The development is concurrent with President Lee Jae Myung's administration advocating for productive finance, urging financial companies to increase their involvement in funding high-tech, high-risk, yet promising sectors.