1. (Retention of designation) The Act requires that a company satisfies the requirements such as total assets of 5 trillion won to be designated as a financial conglomerate and shall be so designated if there is a need to maintain the designation even if the requirements are not met.
- The supervisory regulations specify the requirements for maintaining the designation to ensure that even if the total assets temporarily decline to less than 5 trillion won after designation as a financial conglomerate, insofar as the total assets correspond to at least 4 trillion won, the designation shall be maintained.
2. (Internal control/risk management) Set the details entrusted by laws and regulations in connection with internal control and risk management standards that must be established by financial conglomerates.
- The internal control standards must reflect management measures for internal transactions, business consignment and entrustment, and joint investment among affiliates.
- The risk management standards must reflect the group-level crisis management system, early warning system, and crisis analysis.
3. (Capital adequacy standards) The method of calculating the total amount of equity capital, redundant capital, and the total minimum capital requirements must be more specifically defined as consigned under the laws and regulations, and the method of evaluating the additional capital with risks considering additional risks at the group level and the ratio of addition according to the evaluation must be established.
- The evaluation items must be composed of key items regarding the group's soundness and risk management capabilities to evenly reflect quantitative and qualitative risk factors.
- In consideration of the risk management evaluation of the banking sector, a similar system, the addition ratio of 0-20% must be applied differentially to the addition rate for risks according to the evaluation grade (1+~5-, 15 grades in total).
4. (Reporting and disclosure) In accordance with laws and regulations, further details and procedures that a financial conglomerate must report and disclose to the supervisory authority and the market must be set.
- As specific matters on internal transactions entrusted by the Enforcement Decree, the financial conglomerate's investment and credit offering must be disclosed on a quarterly basis.
5. (Assessment of risk management status) The specific details must be set for risk assessment management status stipulated by laws and regulations.
- It must consist of qualitative assessment items that assess the adequacy of internal control and risk management system operation, policies to maintain adequate capital, risk concentration, internal transaction, risk transfer management, etc., and assessment shall be based on 5 levels in total.
