With approval to issue commercial paper, Samsung Securities has resolved a long-standing project after nine years.
The Financial Services Commission announced on the 9th that it deliberated and approved Samsung Securities' application for short-term financial business at its 15th regular meeting. Samsung Securities is now permitted to engage in commercial paper issuance activities.
Samsung Securities has become the eighth company authorized to issue commercial paper. Previously, Korea Investment & Securities, Mirae Asset Securities, NH Investment & Securities, KB Securities, Kiwoom Securities, Hana Securities, and Shinhan Investment Corp received approval.
Additionally, it resolved a long-standing project regarding commercial paper authorization after nine years. Samsung Securities was designated as a comprehensive financial investment firm (CFIF) with at least 4 trillion won in capital in 2017 but failed to obtain approval for commercial paper operations due to the suspension of review caused by legal proceedings involving its major shareholder.
Recently, it also resolved risks related to regulatory sanctions concerning improper business practices at WM (wealth management) branch offices. If severe penalties such as business suspension had been imposed, obtaining approval would have become inevitable; however, the sanction level was finalized as a warning for institutional investors.
Commercial paper issuance is an activity permitted only for CFIFs with at least 4 trillion won in capital, allowing them to sell commercial papers similar to banks. Securities firms can raise funds up to 200% of their capital through commercial paper issuance, providing opportunities to expand their businesses.
The financial authorities announced a plan to mandate that securities firms allocate at least 25% of the amount raised via commercial paper to venture capital and accepted applications for commercial paper authorization last year. Five securities firms submitted applications; as of now, approvals have been granted to Samsung Securities, Kiwoom Securities, Hana Securities, and Shinhan Investment Corp.
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