Korea steps up investment banking by tapping first IMA operators

South Korea has moved to expand the investment-banking capabilities of its largest brokerages by activating the Investment Management Account (IMA) regime, which is open to firms with at least 8 trillion won in capital. The Securities and Futures Commission, under the Financial Services Commission, has named Korea Investment & Securities and Mirae Asset Securities as the first operators authorized to run IMAs.

What the IMA regime allows

The IMA framework permits brokerages to pool and manage client assets under a single account structure geared toward corporate finance. More than 70 percent of IMA deposits must be invested in corporate-finance-related assets, reinforcing the channeling of capital to businesses.

For clients, the accounts are designed to be principal-protected by the brokerage, with investment returns shared between the firm and the client. This approach is intended to encourage participation while maintaining a conservative risk profile for investors.

Significant funding firepower

Designation as an IMA operator enables a brokerage to raise funds up to 300 percent of its capital base by combining IMA deposits with commercial paper (CP) issuance. As of the third quarter, Mirae Asset Securities reported capital of 10.4 trillion won with 8.3 trillion won in outstanding CP, while Korea Investment & Securities had 10.5 trillion won in capital and 18.7 trillion won in CP. Together, the two firms could mobilize nearly 35 trillion won in additional financing capacity through the IMA channel.

Boosting venture and startup financing

IMA operators will be required to allocate a growing share of raised funds to venture investments, supporting Korea’s startup ecosystem. The minimum venture allocation begins at 10 percent next year and is slated to rise to 25 percent by 2028. This evolving mandate is designed to broaden access to capital for early-stage companies and help diversify Korea’s growth engines.

A framework years in the making

Although the IMA concept was established in 2017 to foster a homegrown model of full-service investment banks, implementation has been gradual. Brokerages needed time to meet capital and governance thresholds, while regulators continued refining operational rules. In April, the head of the Financial Supervisory Service outlined updates to the regime and signaled that initial approvals would arrive this year, aiming to inject momentum into the brokerage sector and direct more private capital to Korean enterprises and ventures.

Expanding access to the CP market

In a related move, the Securities and Futures Commission approved Kiwoom Securities to enter the commercial paper market, making it the first online-focused brokerage to participate. Regulators also indicated plans to authorize additional CP issuers among brokerages with over 4 trillion won in capital, broadening the field beyond the current group of Mirae Asset Securities, Korea Investment & Securities, NH Investment & Securities, and KB Securities.

Why it matters

• Deeper corporate funding: IMAs channel large pools of capital toward corporate finance, potentially lowering funding costs for Korean businesses.
• Startup ecosystem support: The phased venture investment quota is set to increase the steady flow of capital to startups and high-growth companies.
• Stronger balance sheets: Only well-capitalized brokerages qualify, aligning expanded lending and underwriting capacity with stronger risk management.
• Market diversification: Broader participation in CP issuance, including by online-based players, can improve market liquidity and competition.

What to watch next

• Deployment pace: How quickly the newly designated operators ramp up IMA-funded corporate and venture activities.
• Risk controls: The effectiveness of principal-protection mechanisms and governance standards as IMAs scale.
• Additional approvals: Potential designation of more IMA operators and CP issuers as firms meet capital and compliance criteria.
• Impact metrics: Changes in corporate funding volumes, venture deal flow, and borrowing costs over the next few years.

By activating the IMA regime and widening access to the CP market, regulators are positioning Korea’s leading brokerages to play a larger role in financing both established companies and emerging ventures—an evolution intended to strengthen capital markets and support long-term growth.