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As the commercial paper (issuance note) market has been reorganized into a competitive system with eight players, the total outstanding balance is on the verge of reaching 60 trillion won. This rapid expansion follows the government’s emphasis on “productive finance” and the role of comprehensive investment business entities (so-called prime brokerages) as suppliers of venture capital, resulting in a doubling in the number of authorized operators over the past year. As the competition over interest rates and funding heats up, each company’s ability to manage operational risks and maintain profitability is seen as a key factor.

According to the financial investment industry on September 14, the outstanding balance of issuance notes among Korea’s seven authorized issuers stood at 55.9291 trillion won as of the end of June. This represents an increase of 11.5379 trillion won (26.0%) from 44.3912 trillion won at the end of June last year, when there were only four players in the market. Compared to the end of 2025, when the total was 51.3 trillion won, the balance grew by 4.6291 trillion won (9.0%) in just six months.

The rapid expansion of the issuance note market is largely attributable to the entry of new operators since December last year. With Kiwoom Securities, Hana Securities, and Shinhan Investment Corp. having received fresh short-term finance licenses, a flood of offerings featuring relatively higher interest rates has intensified competition. General one-year products offer interest rates in the upper 3% range, and some special promotional rates have even reached into the 4% range.

An industry insider commented, “With new entrants coming into the market this year and overall interest rates on the rise, the competition in sourcing funds, rates, and operations has become much fiercer. There’s a strong sense that everyone is vying to grab the best deals.” As of the end of June, the combined outstanding balance for these three newer players was 3.105 trillion won—1.8159 trillion won for Kiwoom Securities, 999.2 billion won for Hana Securities, and 289.9 billion won for Shinhan Investment Corp. Furthermore, Samsung Securities has recently received approval from the financial authorities, becoming the eighth authorized issuance note operator.

Because issuance notes allow securities firms to raise short-term capital based on their own equity, they offer simpler procedures and more operational flexibility than publicly offered bonds. The funds raised can be funneled into lucrative areas of investment banking such as corporate finance, acquisition finance, and project financing (PF), making issuance notes a key infrastructure in the long-term growth strategies of securities companies.

However, despite the sharp increase in the number of operators, the overall market landscape has yet to undergo significant change. As of the end of June, the four original major players accounted for nearly 95% of the total outstanding balance: Korea Investment & Securities (22.4679 trillion won), KB Securities (11.0031 trillion won), Mirae Asset Securities (10.5776 trillion won), and NH Investment & Securities (8.7751 trillion won). Notably, Korea Investment & Securities alone holds about 40% of the market, firmly maintaining its dominant lead. This creates a “one-strong, three-followers” structure, with KB Securities (19.7%), Mirae Asset Securities (18.9%), and NH Investment & Securities (15.7%) following behind.

In recent months, the original operators’ efforts to “moderate their pace” have become more apparent in the market. NH Investment & Securities saw its outstanding issuance note balance decline from 9.1738 trillion won at the end of March to 8.7751 trillion won at the end of June, a decrease of 398.7 billion won (4.3%). KB Securities also saw a drop from 11.4573 trillion won to 11.0031 trillion won during the same period, down 454.2 billion won (4.0%). This pullback is interpreted as a form of profitability management due to the growing burden of funding costs, with some issuance note products reaching interest rates around the 4% level. According to an industry insider, “With rising interest rates, companies are taking profitability into consideration rather than trying to increase volume aggressively.”

Going forward, a key issue will be how each firm manages operational risks associated with the deployment of raised funds amid intensifying interest rate competition. Given that securities firms use their own capital to source short-term funds via issuance notes, securing a stable margin between funding costs and operational yields is crucial. The government’s policy focus on expanding venture capital supply further elevates the importance of finding viable investment destinations. In addition, due to the short maturities of issuance notes, effective management of maturity mismatches between short-term funding and mid-to-long-term deployment is also essential.

Samsung Securities’ upcoming market entry, with its first product set to launch this month, is expected to add another variable to the market. As Samsung Securities boasts strong wealth management (WM) capabilities focused on high-net-worth individuals, competition for clients among existing operators is likely to intensify. As of the first half of this year, Samsung Securities’ equity capital stood at 8.1566 trillion won, suggesting a potential fundraising capacity of up to 16.3 trillion won when simply applying the issuance note issuance limit. Meanwhile, Meritz Securities, which applied for issuance note authorization at the same time as Samsung Securities, is still under regulatory review.

An industry official stated, “Competition is heating up due to rising interest rates and new entrants, with the policy drive to increase venture capital supply adding further pressure. For securities firms, the operational challenges are multiplying. After the market surpasses 60 trillion won, the real battleground will not simply be about expanding balances, but rather how efficiently funding costs are managed and how stably and profitably the raised capital is deployed.”

This content was produced with the assistance of AI translation services.