Financial Supervisory Service Revises Institutional Private Fund Practical Guide for the First Time in 7 Years

First Revision of Private Equity Fund System Since December 2016
Details of the Reform

The Financial Supervisory Service (FSS) has revised and published a practical guide for institutional private equity funds for the first time in seven years. This is the first revision since December 2016. The update aims to support smooth operations for market participants and promote the sound growth of the related industry.

On the 29th, the FSS announced the publication of the significantly enhanced "Practical Guide for Institutional Private Collective Investment Vehicles (Private Equity Funds)." The guide reflects regulatory amendments related to the private equity fund system reform implemented in October 2021. At that time, financial authorities changed the classification criteria for private equity funds from management objectives to investor criteria and unified management regulations.

The FSS also added major FAQs related to the system reform and new reporting requirements for General Partners (GPs) concerning supervision, inspection, and internal operations in the new guide. It specifically details the procedures for using the electronic system (FINES) for reporting tasks after GP registration, such as GP change reports, financial statement submissions, fund establishment/modification/dissolution reports, and management participation investment reports.

The reason for issuing a new guide after seven years is to enhance industry understanding of institutional private equity funds and improve practical capabilities. The continuous calls from the industry to include system reform details since December 2016 also motivated the publication of this revised edition.

The FSS stated, "Through this revised practical guide, we expect various market participants to improve their understanding of the institutional private equity fund system," adding, "It will greatly help to strengthen both practical and institutional frameworks."

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