There are calls to expand the role of capital markets to facilitate the transition to 'productive finance,' which aims to supply long-term growth capital to innovative companies and strategic industries. Advocates argue for enhanced tax incentives for long-term investments and the creation of an environment that encourages the flow of long-term funds into innovative firms such as those listed on the KOSDAQ.
Kim Se-wan, head of the Capital Market Research Institute, stated at the 29th anniversary conference held at the Conrad Hotel in Yeouido, Seoul, on September 18, "We aim to discuss the role that capital markets must play in the transition to a productive finance system."
Kim added, "If we combine the presentations from experts who have conducted research over the past year with voices from the field, it will serve as a starting point for finding practical solutions."
Financial authorities are set to improve regulations to attract long-term capital into the capital markets. Lee Ok-won, chairman of the Financial Services Commission, emphasized, "Long-term funds linked to personal asset formation, rather than short-term trading and borrowing, should be the backbone of the market," and announced plans to refine products and systems to make long-term investing a rational choice through initiatives like the citizen-participation National Growth Fund and the launch of a productive finance ISA (Individual Comprehensive Asset Management Account).
Lee also mentioned, "We will work with relevant departments to ensure that the financial tax system rewards longer holding periods." Plans are in place to establish a KOSDAQ investment fund within the National Growth Fund, with investments expected to begin in October, alongside efforts to increase the inflow of long-term funds from institutions such as pension funds and policy funds.
The financial investment industry has highlighted the need for 'patient capital' to support companies through their growth stages. Hwang Seong-yeop, chairman of the Korea Financial Investment Association, noted, "While funding for startups has become more active, there is still a lack of patient capital to support them through subsequent growth stages," pointing out that this funding gap remains an unresolved issue.
Hwang also identified the shift of household assets from real estate to capital markets as a challenge. He stressed, "To facilitate the movement of funds from real estate to capital markets, continuous policy efforts are needed to foster a culture of long-term investment."
During the conference, discussions and presentations by experts will cover topics such as improvements to the financial tax system, the role of finance in an economy centered on intangible assets, and strategies to enhance venture investment structures in South Korea and the United States.
* This article has been translated by AI.
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