Financial Authorities Announce Draft Enforcement Decree for IMA

In a significant move to enhance the securities industry's corporate finance competitiveness, financial authorities have announced draft enforcement decrees and regulations. These aim to designate and regulate comprehensive investment business operators, with the goal of launching authorized Integrated Management Account (IMA) operators by year-end.

Key Amendments and Regulations

The Financial Services Commission (FSC) has issued preliminary amendments to the Enforcement Decree of the Capital Markets Act, among others, to provide a legal basis for the "Plan to Enhance Securities Industry Corporate Finance (IB) Competitiveness." The announcement period runs from July 16 to Aug. 25.

Venture Capital Supply: Operators must supply domestic venture capital equivalent to 25% of funds raised through promissory notes and IMA, with the ratio increasing gradually from 2026 to 2025.

Investor Protection Measures: Including the establishment of loss reserves and restrictions on self-dealing to prevent conflicts of interest.

Operational and Risk Management Enhancements

IMA and promissory notes are clearly defined as investment products, with obligations to explain investment risks. The funding limit for IMA is set at 300% of equity capital, combined with promissory notes.

Designation Requirements: Future operators must continuously meet equity capital requirements based on the most recent two fiscal years' settlements, among other criteria.

Support for Corporate Finance by Securities Companies

Improvements include abolishing the obligation to concentrate foreign currency securities for proprietary trading, allowing their use as collateral or for securities lending and borrowing.

An FSC official highlighted the amendment's aim to redirect securities companies' funds from real estate to productive areas like venture capital, offering the public diverse investment vehicles.