Trading platforms / social trading platforms / signal following
FinTechs belonging to this category operate trading platforms or online marketplaces for investment opportunities or certain financial contracts – e.g. securities, factoring etc. and sometimes furthermore provide contact to financial experts and tools for the decision-making.

FinTech-signalling and social trading platforms provide users with the opportunity to exchange opinions on financial investments and offer signal providers and traders the possibility to make their securities portfolio publicly visible. This way the portfolios can be linked to and followed by other traders via the platform automatically, so that the trading and investment strategy of the followed traders can be copied.

The platform often cooperates with a financial services provider or a credit institution where both the trader and the follower hold their securities accounts, and which execute the orders both of the trader and the follower and to which the platform passes on the trading decisions.


Attitude of the country towards trading, social trading or signalling platforms

With respect to trading in general, the market itself has been continuously and steadily expanding as the online/mobile platform has become more prevalent. However, with respect to social trading, as mentioned in Section vi. below, it is hard to say that a proper business market is in place, although the cases of individuals or small/medium-sized companies being caught for performing illegal activities, such as operating the so-called "stock leading rooms" (stock advisory chatrooms), automated AI investing and copy trading, without registering itself as a financial investment business are increasing.

Legal affairs

Obligations and requirements to provide trading, social trading or signalling platforms described above

First, under the FISCMA, only those registered as members of the exchange can trade securities in the securities market, and pursuant to the FISCMA, only those who have obtained authorization as an investment trading business or investment brokerage business may become members of the exchange. In other words, individual investors can trade securities through such investment traders or investment brokers. Therefore, it is our understanding that obtaining authorization as an investment trading business or investment brokerage business in accordance with the FISCMA will be necessary for those who intend to provide a securities trading platform.

On the other hand, social trading platforms may be required to register as an investment advisory business or investment management business depending on the specifics of their services. 'Investment advice' shall mean advising on investment decisions regarding (the value of) financial investment instruments, and 'investment management' shall mean the business of acquiring, disposing of, or otherwise managing financial investment instruments, etc., by classifying them for each investor, while taking into account the financial status, purpose of investment, etc., of such investors with authorization from such investors for making investment decisions with respect to such instruments.

For the authorization/registration as a financial investment business (including investment trading business) under the FISCMA, the following requirements need to be met: (i) the entity shall be a stock company under the Commercial Act or an entity that has established a branch office or any other business office necessary for conducting financial investment business equivalent to the business it currently runs in the foreign country, (ii) the entity shall maintain a minimum equity capital required for each authorized business unit (based on the highest value) investment trading business: KRW 50 billion, investment brokerage business: KRW 20 billion, investment advisory business: KRW 250 million, investment management business



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