Direct investment is a risky investment in a company, while the main task of such a step is to support a profitable business idea with funds and provide investors with a high income. In order to manage PEF, a manager must possess an appropriate level of competence and a certain set of qualities. Also, the fund manager must comply with the legal requirements of the country in which the fund is registered. Today's blog post describes the legal requirements for PEF managers in South Korea.
PEF managers obligations
According to current legislation, PEF and their managers are regulated by the local financial regulator FSC. The functions of the regulator include regular and ad hoc reviews of PEF's operating activities and assets. Starting this year, more attention will be paid to official accounting records. During the inspections, they will be required to clarify all deviations of financial indicators from the values of previous periods. Control over client connections will be strengthened.
The manager is obliged to provide the regulator with the following documents for verification:
- on the establishment of PEF in South Korea;
- on changes in the data contained in the report on the organization;
- about the financial condition of PEF;
- an investment shortly after the asset has been invested in the target firm.
PEF licensing in South Korea
Please be aware that licensing is optional. At the moment, there is only one rule according to which the regulator must receive reports on the creation of the Korean PEF. It should be noted that if a manager intends to obtain a financial license in South Korea to carry out activities as a financial institution, he must obtain the appropriate permission from the regulator.
If you intend to establish a PEF in South Korea, it is important to keep in mind that only registered legal entities can be fund managers.
Those planning to start financial activities in South Korea should be aware that only an individual can make political contributions.
The investors of the Korean fund do not participate in the selection of projects and do not influence it in any way, do not interfere in the management of portfolio enterprises. Usually, PEF in South Korea has an experienced management company operating both domestically and internationally.
For more information on PEF regulation in South Korea, please contact the IQ Decision UK team. Experienced specialists will provide the necessary assistance in a fund set up in Asia, and consult on the regulation of financial activities in Korea.