Deposit comparison and recommendation services via online platforms will be brought into the regulatory system. Platforms must compare and recommend deposit products from at least 3 financial companies, and limits will be imposed on brokerage volumes by financial company and on giveaways and cashback offers.

South Korea's Financial Services Commission said on Sunday it will issue a regulatory notice until Nov. 9 on a revision to the Supervisory Regulations on Financial Consumer Protection to formalise online deposit brokerage services, including online deposit comparison and recommendation, bank linkage for prepaid top-up funds, and settlement services for e-commerce operators.

Online deposit brokerage services have so far operated on a pilot basis through designation as innovative financial services because there were no related registration requirements. The key change is to introduce deposit-type product sales agency and brokerage as a formally registered business under the Financial Consumer Protection Act.

Registration requirements will follow standards for loan-type product sales agency and brokerage, while applying education standards and conflict-of-interest prevention standards suited to deposit products. Products must be listed in the order of conditions favourable to consumers, such as interest rates, and must distinguish products from banks, savings banks and credit unions while ensuring display order is not distorted by fees.

Algorithm verification bodies will be expanded to 3 from the current single body, Koscom, to include the Financial Security Institute and the Korea Financial Telecommunications and Clearings Institute. Sales brokers must have their algorithms re-verified at least once a year.

Rules on business conduct will also be tightened. Sales brokers must compare and recommend deposit products from at least 3 financial companies, and providing special benefits such as giveaways or cashback exceeding 30,000 won per contract will be prohibited. Each platform will be allowed to broker up to 1 percent of each financial company's previous year's new deposit and installment savings amounts, and it will not be allowed to broker products of financial companies that have received prompt corrective action.

A ban on misleading advertisements, aimed at preventing consumers from mistaking sales brokers for the actual contracting counterparty, will be expanded from insurance-type products to all financial products.

The revision will take effect three months after it is announced. Businesses currently operating as innovative financial services will be able to continue their existing operations for six months from the effective date without separate registration, taking into account the registration review period.