FSS Urges Securities Firms to Cut Overseas IMA Investments, Raising Yield Pressure

South Korea’s Financial Supervisory Service recently advised securities firms licensed for investment management accounts, including Korea Investment & Securities, to reduce the share of overseas products and expand domestic asset holdings. According to investment banking industry sources on May 13, the guidance was delivered as the regulator asked Korea Investment, NH Investment & Securities and Mirae Asset Securities to strengthen risk management for IMA products. Korea Investment’s first IMA invested 175.5 billion won, or 15.57% of assets under management, in overseas private debt, and 51.6 billion won in the Ares European Strategic Income Fund. Brokerages say IMA products target a 4% return and guarantee principal, making higher-yielding assets necessary. They also point to a shortage of suitable domestic investment products. Source: hankyung.com.