FSC Approves Meritz Securities as 9th Contingent Note Issuer
Meritz Securities has received final approval as the ninth issuer of contingent notes in Korea.
On September 23, the Financial Services Commission held a regular meeting and designated Meritz Securities as a comprehensive investment business entity (IB) with capital of at least 4 trillion won, approving its application to conduct short-term financial business (contingent note issuance).
Previously, Investment Banks (IBs) with 8 trillion won in capital—Mirae Asset Securities, Korea Investment & Securities, and NH Investment & Securities—and those with 4 trillion won in capital—KB Securities, Kiwoom Securities, Shinhan Investment & Securities, Hana Securities, and Samsung Securities—have been licensed.
Contingent notes are products with maturities of one year or less, issued by securities firms designated as IBs with at least 4 trillion won in capital, based on their own credit, and these firms are allowed to issue up to 200% of their capital.
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By 2028, contingent note-issuing firms are required to supply at least 25% of the funds raised through contingent notes as risk capital within their total assets under management.
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