Global FinTech Guide
Country Name
Korea, Republic of
Asset and portfolio management
FinTechs belonging to this category offer asset and portfolio management services via an internet platform or software programs and usually manage and dispose of the assets of their customers long or short term according to their specifications without actually holding the property or the possession of those assets. FinTechs, which provide information about and access to overnight or time deposit accounts at national and foreign banks and which execute the transactions to these accounts, also belong to this category. Some FinTechs however only act on request of the customer.

Aside from that some FinTechs offer software or internet solutions enabling users to manage and plan their personal finances on their own by providing graphics, overviews and compilations of their financial data and sometimes indicating financial risks or opportunities, but without actually managing the assets.


Attitude of the country towards modern asset and portfolio management services

With the robust growth of FinTech, FinTech companies are actively providing asset management services, and, increasingly, financial companies are partnering with FinTech companies to provide asset management services. The financial regulators also have an optimistic outlook, expressing that with the introduction of the MyData business under the amended Credit Information Use and Protection Act, it would be possible for businesses to provide advanced wealth management services by analysing consumption patterns and other data.

Legal affairs

Obligations and requirements to provide asset and portfolio management, or ancillary services described above

The business of managing another person’s assets may constitute a discretionary investment business or collective investment business under the Financial Investment Services and Capital Markets Act (“FISCMA”). In general, asset management services other than funds do not collect and manage investors’ funds, but rather manage investment assets for each investor, taking into account the investor’s financial standing and investment purpose, etc. Such asset management falls under the definition of discretionary investment business under the FISCMA. However, if the scope of services does not rise to the level of management, and only investment advice is provided, this would be considered an investment advisory business under the FISCMA described under Section c below. 

Under the FISCMA, "discretionary investment business" means the business of acquiring, disposing of, and managing financial investment instruments, etc. on behalf of investors, taking into account the financial standing, purposes of investment, etc. of such investors, with authorization from such investors to make investment decisions at the company’s discretion. Investment decisions refer to decisions relating to the asset type, acquisition, disposition, methods of acquisition or disposition, quantity, price, timing, etc. In order to manage investors’ assets and make investment decisions on their behalf, one must be registered with the Financial Services Commission (“FSC”) as a discretionary investment business under the FISCMA.

To register as a discretionary investment business, the applicant must meet the following requirements: (i) the applicant must be a joint-stock corporation under the Commercial Act or a foreign equivalent of a discretionary investment business entity which has established a branch or other business office necessary for the execution of discretionary investment in Korea. However, if the foreign discretionary investment business entity directly conducts business with Korean residents from a foreign country or using means of communication, no local presence is necessary; (ii) depending on the client base, different minimum capital requirements apply (if there will only be professional investor clients, KRW 500 million; if general investors are also involved, KRW 1.5 billion); and (iii) the applicant must also secure 2 or more full-time investment managers, meet certain requirements for executives and major shareholders.

Collective investment means the business of investing money, etc. pooled from at least two investors, to acquire, dispose of, and manage by any other method, investable assets with property value, without receiving any ordinary management instructions from investors, and distributing the returns to the investors. One who intends to engage in the collective investment business must be licensed by the FSC as a collective investment business entity under the FISCMA. To be eligible for a collective investment business license, the applicant must meet requirements similar to that of the discretionary investment business license, and depending on the type of collective investment scheme being managed, the applicant will need to have minimum capital of at least KRW 2 billion to KRW 8 billion. However, even if one can satisfy these requirements, in practice, the license is known to be granted to only a very limited number of applicants. 

If the investment scheme is limited to 100 investors, this would constitute private placement, and this type of asset management could be provided by registering as a hedge fund instead, which would be less cumbersome than obtaining a collective investment business license. However, since the 100-investors threshold includes those making the investment recommendation, we expect it would be difficult for a FinTech company to offer asset/portfolio management services using only a hedge fund registration. 

Additional comments regarding the legal situation for asset and portfolio management services or what FinTech’s must be aware of in this business area

A discretionary investment business entity, other than in certain exceptional cases, may not receive a performance fee linked to the investment outcomes and management performance, and it must comply with regulations on unsound business practices under the FISCMA, such as the prohibition on collective management of multiple investors’ assets.

Collective investment business entities must comply with the restrictions on collective management and other regulations relating to unsound business practices under the FISCMA. 

Economic conditions

Market size for asset and portfolio management services and biggest companies in this business area

Although we cannot confirm the size of the market for asset and portfolio management services, currently, more than 1 million people are investing or receiving investment advice through major AI wealth management apps. The market for robo-advisor services is especially growing rapidly, with KRW 2 trillion worth of assets under management.

Additional comments regarding the economic situation for asset and portfolio management services or what FinTech’s must be aware of in this business area

Since the pandemic started, there has been surging demand for digital investment solutions to replace face-to-face investment services. The mobile asset management services market is growing rapidly, and innovative technologies such as artificial intelligence (AI), robot process automation (RPA) and machine learning have enabled efficient and in-depth customer analysis. These trends have driven many FinTech and big tech players to launch their own asset management services. With traditional financial institutions such as banks also aiming to actively participate in the market, competition in the mobile asset management services market is expected to be fierce.




© 2022, Lee & Ko. All rights reserved by Lee & Ko as author and the owner of the copyright in this chapter. Lee & Ko has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this guide.

The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.


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