Questions Concerning the Application Procedure
The Financial Supervisory Service reviews the demand survey application forms to decide which should be introduced to the Innovative Financial Service Review Committee for deliberation and approval. That is, you must submit a demand survey application in order to proceed with the procedure related to the innovative financial service designation.
No. Although it is true that a demand survey period gets designated and demand survey application forms are received beforehand (three demand surveys have been conducted to date), this is only to facilitate the operation of the innovative financial service designation system, rather than for the purpose of placing a time limit on application submission. In order to discover and support innovative ideas, companies can actually file their application anytime, even outside the designated period.
Do I have to go through the consulting procedure with the Fintech Center in order to apply for the innovative financial service designation?
Receiving the Fintech Center’s consulting service is not mandatory, but it is highly recommended to ensure that applicants can proceed with the innovative financial service application procedure with minimal problems. The consulting service is provided together with the On-Site Fintech Advisory Group from the Financial Supervisory Service, so it will be quite helpful to fintech companies who aren’t sure whether they have filled out their application forms correctly or the information they have provided is adequate.
When you submit a demand survey application to the Fintech Center, the person in charge will pas it on to the Financial Regulatory Sandbox Team of the Financial Services Commission (FSC) and the Fintech Innovation Office of the Financial Supervisory Service (FSS). Later, it is delivered to the relevant departments, according to the details of the service concerned, and the person in charge of reviewing the application will perform a review. <br />However, if the Fintech Center believes that the application form was not filled out as required, the service description is insufficient, or it does not meet the regulatory sandbox requirements, it will offer consulting to the applicant for the necessary modification and supplementation before the application form is passed on to the FSC and FSS.
It’s possible to supplement your demand survey application anytime after submission. In order to prevent confusion, we advise that you include the description, “Supplementary information for an existing demand survey application,” in the email title to let the recipient know that an application has already been filed.
Once the designation applications to be introduced to the Innovative Financial Service Review Committee are decided and confirmed prior to the committee meeting, the person in charge at the center will contact the applicants by phone or email and request them to file an official application.
Is a field survey carried out during the review process for the innovative financial service designation?
Although other statutes concerning finance require field surveys to be carried out if such is necessary to verify the details provided for a license, permit, etc., the Special Act on Support for Financial Innovation does not require any field surveys, and thus the financial authorities primarily perform document screening, reviewing the designation application form, evidentiary materials, etc. <br />However, in case it is deemed that the information provided is insufficient, etc., the financial authorities may request the applicant to supplement the application package, and the applicant must follow the instructions to proceed with the application process.
Does the innovative financial service application procedure proceed differently for “preliminary designation” and “official designation”?
License, permit, etc. procedures under various other finance-related statutes may proceed as “preliminary license, permit, etc.” and “official license, permit, etc.” However, the Special Act on Support for Financial Innovation does not stipulate any provisions regarding a preliminary designation, and thus the innovative financial service application Procedure proceeds without a preliminary designation stage.
Questions Concerning the Eligibility Criteria
Article 4 (1) of the 「Special Act on Support for Financial Innovation」(hereinafter referred to as the “Act”) stipulates the eligibility criteria for designation as innovative financial service as “① financial companies, etc., and ② companies under the 「 Commercial Act」, the business places of which are domestically located,” and thus in order to apply for designation as innovative financial service, the applicant must be a company that was been established in accordance with the 「Commercial Act」.
Is it possible for a company to apply for designation of multiple services as innovative financial services?
It is possible for a company to apply for designation of multiple services as innovative financial services. Each application will be reviewed separately under the Special Act on Support for Financial Innovation.
Is it possible for multiple companies to form a consortium and apply for designation as innovative financial service?
There are cases in which two or more companies jointly obtained the innovative financial service designation.* When filing a joint application, it is necessary to clarify the scope of business of each party (e.g. financial firm and fintech firm) to the consortium. Also, please note that every single party involved must comply with the obligations (e.g. filing the initial, intermediate, and final reports, etc.), while providing the innovative financial service in question. <br />* Example) Shinhan Card & Shinhan Investment, Kasa Korea & trust company, NICE Information Service & 3 carriers, QARA & Mirae Asset Securities
If the foreign company in question does not fall under the category of “financial companies, etc.,” defined by the Special Act on Support for Financial Innovation, or the category of “companies, etc.” under the 「 Commercial Act」, the business places of which are domestically located, we believe it will be difficult to apply for the innovative financial service designation. <br />On the other hand, if the foreign company establishes a company, as defined by the Commercial Act, with its place of busines located in Korea, it will be eligible to apply for designation as innovative financial service. When this is the case, the company will need to provide adequate explanation, as required by the review criteria for the innovative financial service designation, and it is advised that the relevant evidentiary materials be submitted to back up the information. * Example) Serviced region: Whether the provider of the financial service in question is primarily carry out its business in the domestic financial market
When multiple companies file applications for a similar service model, will all of them obtain the designation?
The designation application is not automatically approved or rejected based on the similarity of the service models in question. It is actually decided based on the capacity of the applicant to operate the service, the differences between the business plans of the applicants, the details of the service, and the way it will be provided among various other factors that differentiate the applicants and their services. <br />Other matters that are taken into consideration include the impact of the similar service, which has already been designated, following its release on the market such as the stability of the financial market, benefits for consumers, etc.
Do I have to submit all the attachments for each item listed for the innovative financial service designation application (official application form)?
The attachments for items 1, 2 and 3 are requested to check the current status of the applicant company and must be submitted along with the official application form. All other attachments are submitted to provide additional information that can supplement the information provided in the application form, and it is up to the applicant company to decide which documents to submit. When filing an official application, check off the documents that you will actually be submitting on the attachment checklist (Form No. 04).
When a company receives the innovative financial service designation, does it have to launch the service without delay?
The Special Act on Support for Financial Innovation requires the Financial Service Commission to specify the effective period of the designation when granting the innovative financial service designation, but it does not require the company that is granted the innovative financial service designation to launch the service without delay. <br />However, please note that if the company that was granted the innovative financial service designation does not provide the service in question for a long period of time, the designation may be canceled, or a corrective action command may be issued.
Is there a guideline on what would be an appropriate amount of time to prepare for service launch following the innovative financial service designation?
There is no designated guideline on how long one should prepare for service launch following the innovative financial service designation. However, the effective period of the innovative financial service designation actually includes the preparation time for service launch, which means that if there are delays in preparation, the designation may expire before the service even gets launched. So make sure to take this into account when preparing for the service launch.