[Column] Financial Supervisory Commission partly amends its P2P lending guidelines - what should be noted by financial companies?

The legal protection of investors in P2P lending is expected to be enhanced in view of the Proposed Extension and Partial Amendment of P2P Lending Guidelines published by the Financial Supervisory Commission on January 1, 2019.

The Financial Supervisory Commission had already published the relevant guidelines around February 2017 in order to ensure the safety of the financial market while protecting both the investors and borrowers, considering various problems and disputes arise while the P2P lending market is growing rapidly, increasing the number of investors. However, as the P2P lending guidelines have no legal binding force, more and more P2P lending investors have suffered damages. The National Assembly has started a discussion to enact five different statutes in this connection.

In addition, as the fintech market has also grown in size, the Financial Supervisory Commission prepared a partial amendment to the P2P lending guidelines in early 2019 but announced a grace period until December 31, 2019. It is thus necessary for the P2P lending-related financial service providers to study the provisions of the guidelines concerning P2P lending and fintech. In particular, when a platform related to P2P discontinues its service as it is liquidated or closed, as the Financial Supervisory Commission emphasized, the investors should prepare procedures for entrusting the liquidation processes to a law firm or other outside agencies in advance in order to prevent damages. As these guidelines are published by the Financial Supervisory Commission to maintain market discipline before a law is enacted, they are not yet mandatory, but it is desirable to be prepared preemptively as they are closely related to the laws to be enacted.

VEAT Law Firm has rich experience in providing legal counseling to various P2P lenders such as Tera Funding and Lendit. Those needing to review the legitimacy of their service based on the P2P lending guidelines are invited to contact VEAT Law Firm at their convenience.