Meritz Securities will join the commercial paper market after being designated as a major investment business operator and receiving approval for short-term financing.

The Financial Services Commission said it deliberated and approved the designation of Meritz Securities as a major investment business operator with at least 4 trillion won in equity capital, and approved its short-term financing business, at its 16th regular meeting held on Tuesday. Meritz Securities will now be able to conduct commercial paper business.

The approval increases the number of major investment business operators that can engage in short-term financing to 9. The commission expects fundraising through commercial paper to be used to meet companies' diverse financing needs, including the supply of venture capital.

With the approval, Meritz Securities secured status as a major investment business operator with at least 4 trillion won in equity capital and will be able to issue commercial paper through its short-term financing business.

Commercial paper is a short-term financial product issued on a securities firm's own credit by a major investment business operator with at least 4 trillion won in equity capital that has received short-term financing approval from financial authorities. Securities firms can use funds raised through commercial paper for corporate finance and investments.

Existing commercial paper operators are Mirae Asset Securities, Korea Investment & Securities, NH Investment & Securities, KB Securities, Kiwoom Securities, Shinhan Investment Corp, Hana Securities and Samsung Securities. With Meritz Securities added, competition among operators for fundraising and customer acquisition is expected to intensify further.