KOR

Research Staff

Research Staff

Kim, Kab Lae Senior Research Fellow Capital Markets
Head of the Center, Financial Law Research Center
Research Field

Profile

TEL
82-2-3771-0656
E-mail
klkim@kcmi.re.kr
Education
2005-2008 SJD (Doctor of Judicial Science), Indiana University School of Law-Bloomington, Bloomington, IN
2003-2004 LL.M. (Master of Law), Indiana University School of Law-Bloomington, Bloomington, IN
1991-1995 Bachelor of Law, Kyung Hee University, College of Law, Seoul, Korea
Professional Experience
2012 - present, Research Fellow, Korea Capital Market Institute, Seoul, Korea
2011 Assistant Professor, Sejong University School of Business (accredited by AACSB)
2008 - 2010, Research Fellow, Korea Capital Market Institute, Seoul, Korea
2007 Intern (full time), General Legal Division, United Nations Headquarter, New York
2007 Judicial Intern (full time), Indiana Court of Appeals, Indianapolis, Indiana
- Licenses and Certificates -
Enrolled Agent, IRS, Enrolled in 2017
Attorney at Law, New York, Admitted in 2006
Certified Securities Investment Consultant, Korean Securities Dealers Association, Certified in 2003
International Trade Specialist, Korean International Trade Association, Certified in 1998

Publications

Opinion

Korean Tax System for Capital Gains from Security Tokens: Issues and Improvements / Nov. 07, 2023
In the process of introducing the issuance and trading system for security tokens, it is disappointing that the Korean government has not properly overhauled related tax codes and rules. There is significant uncertainty in the market regarding how the Korean tax authority will treat capital gains from trading of tokenized investment contract securities. Currently, capital gains from tokenized non-monetary trust beneficiary certificates are considered dividend income, which hardly aligns with investors’ perception and taxation principles under the current income tax regime. The unreasonable taxation of security tokens should be tackled within the framework of the financial investment income tax regime scheduled to be implemented in 2025. As there is a taxation loophole regarding capital gains from tokenized non-monetary trust beneficiary certificates, it is worth considering incorporating these capital gains into the framework of the financial investment income tax regime by revising the Income Tax Act. Until the financial investment income tax regime takes effect in 2025, it is desirable to exempt capital gains from tokenized investment contract securities and non-monetary trust beneficiary certificates from taxation. If efforts to improve the taxation system for capital gains on tokenized securities are neglected, there is a possibility that public opinion might favor postponing the related taxation due to inadequate tax preparations, potentially delaying the implementation of the financial investment income tax system.
Thoughts on Whether a Digital Asset is a Security under the Comprehensive Regulatory Framework on Financial Investment Instruments / May. 16, 2023
The criteria for whether a digital asset is a security are critical to determining the legal jurisdiction of digital assets. Countries with a comprehensive regulatory framework on financial investment instruments, such as the US and South Korea, have announced guidelines for the securities nature of digital assets in a bid to reduce relevant legal uncertainty. It is notable that under the comprehensive regulatory framework, the characteristics of securities should be determined on a case-by-case basis. It seems hard for market participants to predict whether a digital asset is a security, given the lack of precedents regarding the determination of the securities nature.The Korean government and market participants should consider the following aspects to reduce legal uncertainty and improve predictability regarding the securities nature of digital assets. Digital asset issuers must seek legal advice for whether digital assets are securities when designing digital asset projects, and need to actively make preliminary inquiries (no-action inquiries, etc.) to the supervisory authorities to minimize legal risks. Virtual asset exchanges should clarify the screening standards regarding the securities nature of the virtual assets which are eligible for trading support. Also, it should thoroughly review legal opinions submitted for the screening along with related documents including white papers. When investing in highly speculative altcoins (alternative coins), virtual asset investors should keep in mind legal risks related to the securities nature. The supervisory authorities should actively respond to market participants’ inquiries regarding the securities nature of digital assets. To enhance the legal clarity and predictability on the securities nature issues, they need to rationally institutionalize the process of determining whether a digital asset is a security. Also, they should make more specific the guideline for investment contract analysis of digital assets.
Need for Prompt Enactment of Unfair Trading Regulations on Digital Assets / Nov. 22, 2022
Korea’s unfair trading regulation on digital assets falls behind other advanced countries, as evidenced by its absence of proper legislation and regulatory void. Currently, a fraudulent act involving digital asset transactions could be punished for fraud in Korea pursuant to the Act on Door-to- Door Sales, the Act on the Regulation of Conducting Fund-Raising Business Without Permission, the Criminal Act or the Act on the Aggravated Punishment of Specific Economic Crimes. However, these laws have limitations in combating unfair trade practices that arise from massive transactions in the digital asset market. To fill a regulatory gap and facilitate sustainability in the digital asset market by boosting credibility, Korea should single out provisions that are common and highly important in digital asset bills pending in the National Assembly and turn them into law by priority. In this respect, the regulation on unfair digital asset trading should take priority over other regulatory measures.If the digital asset law aimed at regulating unfair trade practices is enacted as the first step, the following three benefits could be achieved. First, it would have the effect of strong ex-post enforcement against unfair trade practices that are prevalent in the digital asset market. Second, the law could help prevent unfair digital asset transactions by demotivating potential offenders. Third, moral hazards stemming from an unfair trading regulatory gap could be alleviated. Considering the expected positive effects of unfair trade regulations set forth in the recently proposed Acts on digital assets, the Act focusing on unfair trading provisions should be promptly enacted. Even after the initial legislation is completed, the government and the National Assembly should keep working on follow-up legislative initiatives including mandatory disclosure, regulation on service providers, self-regulation, and stablecoins.
Fractional Investment Guideline in Korea: Importance and Challenges / Jun. 14, 2022
On April 28, 2022, the Financial Services Commission published the Guideline on Securities Businesses Dealing with Fractional Investment. The Guideline is of significance in that it intends to increase predictability for market participants and protect investors against regulatory risk in response to the digitalization of financial instruments in the capital markets. It specifies the standards for determining whether a fractional investment product qualifies as a security under the Financial Investment Services and Capital Markets Act and the checklist for confirming the legitimacy of fractional investment. It also recommends that a fractional investment business, not legally permitted under the existing legal framework but recognized for its innovativeness and necessity, be carried out through the financial regulatory sandbox program. In this regard, the Guideline can be seen as an approach to achieving a balance between regulation and development of fractional investment. Given that the designated period of financial regulatory sandbox is up to four years (two years + two years), if a fractional investment business is recognized for its innovativeness and necessity and proven to take sufficient investor protection measures, its legitimacy should be guaranteed to ensure sustainable business operation. This necessitates reform of the related regulations. Relevant regulatory improvements should be reviewed with a focus on regulatory exemption cases applicable to the sandbox program for fractional investment. Aside from the legal framework for promoting fractional investment, it is necessary to explore measures to control the speculative nature of fractional investment. To this end, further discussions are needed to find improvement measures, such as qualification requirements for an issuer of fractional investment securities, a stricter obligation of a broker-dealer regarding disclosure of information and tougher suitability and adequacy principles to protect financially vulnerable investors.

Seminar Presentation

관련 세미나 이미지
2017 Sep 15
Legislative Considerations for Capital Gains Tax on Financial Investment Products (Korean)
  • Presenter Senior Research Fellow Kim, Kab Lae
관련 세미나 이미지
2013 Sep 25
Sustainable Economic Growth and Welfare Expansion through Social Investments
  • Presenter Senior Research Fellow Kim, Kab Lae

Research performance

Study on the Measures to Advance the Listing and Delisting System, ordered by the Korea Exchange, 2018 (Project Manager) 
Measures to Improve Timely Disclosure System, ordered by the Korea Exchange, 2017 (Project Manager) 
Study on Promotion of the Creative Social Economy System, ordered by National Economic Advisory Council, 2014 
Study on Trading of Greenhouse Gas Emission Permits, Supervision of Emission Permits Exchange, and Regulation on Intermediaries, ordered by Koreas Ministry of Environment, 2014 (Project Manager) 
2013 VC/PE Market Research and Policy Study, ordered by Korea Venture Investment Company, 2013 (Project Manager) 
Study on Measures to Enhance the Management Transparency of Listed Companies, ordered by the Korea Exchange, 2012 (Project Manager) 
Study on Improvement of the Corporate Disclosure System in Korea, ordered by the Financial Services Commission, 2012 (Project Manager) 
Study on Measures to Promote Emerging Growth Companies through Capital Markets, ordered by the Korea Exchange, 2012 
Roadmap to Advance the KRX’s Listing System, ordered by the Korea Exchange, 2011 
Analysis and Policy Implications of the Dodd-Frank Wall Street Reform and Consumer Protection Act, ordered by the Financial Services Commission, 2010 
Measures to Facilitate the Exit Market for Venture Investors, ordered by Small Medium Business Corporation, 2010 
Measures to Improve Regulation of Backdoor Listings on the KRX, ordered by the Korea Exchange, 2010 (Project Manager) 
Analysis of the Market Structure of and Development Plan for Financial Investment Services, ordered by the Financial Services Commission, 2009 
Study on the Introduction of the Act on the Sale of Financial Products, ordered by the Financial Services Commission, 2009 
Introduction of the Special Purpose Acquisition Companies (SPACs) to the Korean Capital Market, ordered by the Korea Exchange, 2009 (Project Manager) 
Analysis of the Corporate Restructuring Market in Korea and Improvement Measures to facilitate the Market, ordered by the Korean Ministry of Knowledge Economy, 2008

Other Activities

US Law Review
Implication of U.S. Venture Capital Theories for the Korean Venture Ecosystem, Journal of Business, Entrepreneurship, and the Law, Vol. 2, No.1, 2009 
A Study on Rule 145 of the Securities Act of 1933: How to Provide the Clarity and Predictability in Rule 145 Transactions, Akron Law Review, Vol. 40, No. 1, 2007 


Korea Citation Index Journal
A Study on the Advancement of Korea’s Private Funds Legislation, Advanced Commercial Law Review, Vol. 63, 2013 
Analysis of Legislation for Private Investment Pools under the U.S. Federal Securities Laws System after Dodd-Frank Financial Reform, Korean Journal of Financial Management, Vol. 30, No. 1, 2013 
Case Studies on Corporate Social Responsibility in the U.S. and the Policy Implication for Korea, Korean Journal of Securities Law, Vol. 13, No. 1, 2012 
The New Trend in Regulatory Systems for Financial Professionals: The Harmonization of the Broker-Dealer and Investment Adviser Regulatory Systems, The Korean Journal of Securities Law, Vol. 10, No. 2, 2009 
The Google Story: Viewed from Perspectives of Venture Capital Cycle and Implicit Contract Theories, Korea Commercial Cases Journal, Vol. 20, No. 1, 2007 
A Study on Private Offerings under the U.S. Securities Regulation System: Focusing On Federal Court Cases and SEC Interpretations, Korea Commercial Cases Journal, Vol. 19, No. 3, 2006