The Financial Services Commission (FSC) of South Korea announced on June 10 that financial institutions participating in the National Growth Fund will be exempted from sanctions by the Financial Supervisory Service (FSS) in cases of incurred losses, provided there is no intent or significant negligence. This decision aims to encourage private sector investment in strategic and innovative industries by alleviating the burden on financial institutions associated with long-term and high-risk investments under the fund's operation, which is valued at 150 trillion won.

The exemption applies to various funding activities, including joint investment in projects directly funded by the National Growth Fund, indirect investments as limited partners, and investments or loans related to infrastructure in advanced strategic industries. This regulatory change is intended to mitigate the potential repercussions that financial institutions might face for participating in high-risk ventures, thereby fostering a more supportive environment for innovation and growth in vital economic sectors.

Additionally, the FSC urged financial companies to consider reforms regarding internal personnel matters related to investment losses. During a recent meeting, FSC Vice Chairman Kwon Dae-young emphasized the importance of assessing personnel-related penalties linked to productive finance investment losses and encouraged firms to communicate specific requests should they seek further governmental exemptions. The overall goal is to smooth the operation of the National Growth Fund and promote active participation from the financial sector in innovative and strategically important projects.