"This is no time to be held back by unnecessary controversy"—Korea Fintech Industry Association urges decision on licensing for fractional investment

"Delays in market launch must not cost us the golden window for financial transformation"

The Korea Fintech Industry Association (KORFIN), a fintech industry group, called for a swift decision on licensing a "fractional investment over-the-counter (OTC) exchange."

KORFIN, which counts more than 500 fintech companies as members, said in a statement that "licensing the secondary market for fractional investment is a key foundation for the development of Korea’s future digital finance ecosystem" and that "we must not miss the golden window for next-generation financial transformation due to delays in launching the market caused by recent controversy."

The association said, "Since 2016, when the concept of fractional investment began to be recognized, numerous fractional investment firms have turned innovative underlying assets into financial products, creating new funding channels across a range of industries," adding, "However, institutional constraints have left unresolved tasks such as liquidity provision and market revitalization, and therefore bringing fractional investment into the regulated system is expected to be a major turning point that will ease the industry’s long-standing thirst."

It went on to warn that "as many fractional investment operators are staking their survival on this OTC exchange license in order to realize a long-held wish to revitalize the market, the decision to put off licensing could push the entire fractional investment industry to the brink of collapse."

The association said, "We are concerned that fractional investment firms that have waited a long time for market revitalization through institutionalization may, due to delays in launching the market, end up letting go of even their last thread of hope."

It added, "Right now, rather than unnecessary controversy, we must work—according to procedure—for a swift market launch and revitalization," emphasizing the need to promptly resume discussions and reach a decision on the OTC exchange license.

Earlier, the agenda item on the "preliminary approval application for a financial investment business license for a fractional investment OTC exchange" had been expected to be approved at the Financial Services Commission’s regular meeting on the previous afternoon, but the FSC did not even put it on the agenda. It is unusual not to bring to the regular meeting a matter that had even passed the agenda subcommittee that pre-coordinates items to be tabled at that day’s meeting. With only two of the three applicant consortium firms set to obtain approval, Lucent Block—at risk of failing—has publicly pushed back, which is seen as having put pressure on the FSC.

Shin Min-kyung, Hankyung.com reporter radio@hankyung.com