[9691]
February 20, 1998
TO: INTERNATIONAL COMMITTEE No. 8-98
RE: INSTITUTE LETTER ON KOREAN MINIMUM CAPITAL REQUIREMENTS
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Attached is a copy of the Institute’s letter to the Korean Ministry of Finance and Economy
requesting that Korea significantly reduce or eliminate its 30 billion Won minimum capital requirement
on investment trust management companies (ITMCs). Since 1996, foreign firms have been permitted to
enter the Korean market by setting up joint venture ITMCs with Korean firms subject to, among other
things, the minimum capital requirement and a 49% limitation on foreign ownership. While the
limitation on foreign ownership is set to expire in December 1998, the minimum capital requirement will
remain. In the letter, the Institute urges Korea to significantly reduce or eliminate the requirement,
arguing that it is not needed for investor protection and will operate as a barrier to entry for foreign firms.
Robert C. Grohowski
Assistant Counsel
Attachment