Mirae Asset Securities Chairman Choi Hyun-man, right, holds an agreement with Hana Financial Group Chairman Ham Young-joo during a signing ceremony held at a Hana Financial Group office in downtown Seoul on May 31. Photo courtesy of Mirae Asset Securities

Two corporations will cooperate in security token business

South Korea’s foremost brokerage house Mirae Asset Securities announced on June 1 that it would join hands with Hana Financial Group tap into the security token industry.

Under the alliance, Hana Financial Group will join the Next Finance Initiative (NFI), a consortium geared toward carrying out the security token business.

Such Hana Financial affiliates as Hana Bank and Hana Securities, which will put forth efforts to create a decentralized network called mainnet together with Mirae Asset.

In addition, the two outfits agreed to cooperate in encouraging security token offerings and finding out innovative services powered by blockchain technology.

They will also join hands to establish systems necessary to protect consumers so as to make inroads into other countries as the security token business is not limited by national borders.

In March, the country’s leading mobile operator SK Telecom also decided to take part in the NFI, which is expected to build an eco-system related to security tokens.

“The participation of Hana Financial Group helps us advance one step further toward the innovation of the financial business, which has been our dream for a long time,” Mirae Asset Securities Chairman Choi Hyun-man said.

“Through the security token business, we will focus on unprecedented financial services by sympathizing with the needs of young generations.”

Hana Financial Chairman Ham Young-joo also welcomed the collaboration.

“We are glad to join hands with Mirae Asset Securities, which has the best competitiveness, infrastructure, and experience in the fledgling security token segment,” Ham said.

“Based on a solid partnership, we will bring about innovative products and services, putting the values of customers first.”

What is security token?

A security token alludes to the latest financial instrument aimed at representing an ownership interest in an asset. As a regulated digital asset, it tends to use such latest technologies as decentralized networks and smart contracts.

Any kind of asset, including stocks, bonds, and real estate, can be tokenized. Backed by real-life assets, it is designed to raise funds from accredited investors from across the globe.

This is why security token offerings are gaining attention among startups as an alternative to a private equity fund, venture capital, or initial coin offerings.

In return, investors, or the token holders, garner certain rights like dividends, profit sharing, buy-back right, and voting right.

Earlier this year, the Financial Services Commission released guidelines on security token offerings, claiming to regulate ones backed by investment contract securities and beneficiary certificates.

Yet, the financial regulator claimed that such a move was not geared toward preventing the development of new financial instruments. It was about protecting investors, it said.

After the measure, Mirae Asset Securities was the first to tap into the promising business in a full-fledged manner.

A month after the announcement, the Seoul-based brokerage created the NFI by signing a memorandum of understanding with SK Telecom.

Back then, Mirae Asset Securities promised to attract other major corporations, and the first one proved to be Hana Financial Group, one of the country’s big financial groups.

The publisher studied Korean history in Seoul and management of business administration in the United Kingdom. He has 20-year experiences in the media business. Kim can be reached at voc200@gmail.com or 82-2-6956-6698.