Capital Market Opinion (Ceased)
2013 May/28
Regulatory Challenges in Alternative Investments in Korea
May 28, 2013
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- Summary
- In the post-crisis era, alternative investments (AI) are gaining attention as an effective portfolio diversification tool. But due to their high-risk tendency, the international financial markets have strengthened risk management and regulations related to AI in their pursuit for financial stability. In Korea, AI funds are mainstream, representing about 30% of the total funds market. Under the circumstance, it is critical to overhaul related regulations. More specifically, Korea should improve transparency in the AI market, reduce regulatory arbitrage between AI vehicles, and pursue market development as well as financial stability.