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Korean regulators ease up on special asset funds

2018.02.23 14:54:08 | 2018.02.23 14:54:41
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South Korea’s financial regulators have decided to ease regulations on special asset funds dedicated to aircraft or vessel investments in order to bring more vitality to the alternative fund market.

On Friday, the Financial Supervisory Commission (FSC) issued a prior notice on the revision of the current law for deregulations.

Special asset funds allocate more than 50 percent of fund assets to non-securities or non-real estate assets such as aircraft, artworks, ships, subways, mines, intellectual property rights and certified emission reduction contracts.

Those funds have drawn market interest as an alternative investment vehicle as it enables various investment options and easy development of financial products.

The local market of special asset funds has grown steadily, driven by low interest rates for many years. As of Feb. 21, the net asset value of special asset funds reached 58.28 trillion won ($53.95 billion), up 17.9 percent from 49.43 trillion won a year ago.

The commission also allowed real estate or special asset funds to set the profit/loss allocation structure differently when they enter into agreements on loss coverage in preference to other investors.

Other deregulatory measures include easing in the reporting burden on managers of private equity funds.

By Kim Dong-eun and Minu Kim

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]

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