In relation to the total income swap, the so-called'Lime-Optimus Prevention Act' was proposed, which mandated the asset risk assessment of securities companies.
Rep. Kang Min-guk, a member of the National Assembly's Political Affairs Committee, said that after discussing the Party's'Lime-Optimus Power Violation Gate Special Committee', he proposed an amendment to the Capital Market Act.
The amendment made it mandatory for securities firms to assess the risk of assets in relation to the'total income swap', which was a problem during the Lime asset management crisis, and included a proposal to cancel the registration of the financial investment business if this is not observed.
Total Return Swap is a service that a securities company raises funds for a private equity fund and receives commissions, and private equity funds can expect more profits from borrowed funds, but if a loss occurs, the damage to the general investor increases sharply.
In fact, Lime Asset Management actively used this total return swap, which inflicted greater damage on ordinary investors.
The amendment also included content so that the seller must issue a'core product description' to investors, and the authorities can request correction from the manager if the manager does not operate according to the core product description.
Rep. Kang explained, "We have reinforced regulations that were partially relaxed to revitalize private equity funds to the level of public offering funds," and said, "We reflected the opinions of financial authorities and investors gathered through special commissions."
(Photo = Yonhap News)