Securities and Exchange Commission, ‘music copyright fee participation right’ securities judgment
Subject to capital market law regulation, but conditional sanctions suspended
Musiccow needs to take measures to protect investors within 6 months
Music cow logo. Music cow provided
The financial authorities judged the product of ‘Music Cow’, a music copyright investment platform, as ‘securities’. As a result, Music Cow was included in the subject of regulation under the Capital Market Act, but the financial authorities decided to suspend sanctions for violation of regulations for six months on condition that measures to protect investors were prepared.
On the 20th, the Securities and Futures Commission (SEC) under the Financial Services Commission held a regular meeting and judged the ‘right to claim participation in music copyright fees (right to receive profits from music copyrights)’ issued by Music Cow as ‘investment contract securities’ under the Capital Market Act.
Investment contract security is a concept introduced in 2009 to expand the concept of financial investment products. It means that a specific investor invests money in a joint project and indicates the contractual right to obtain profit or loss as a result of the joint project. . Music Cow is the first case of investment contract securities in Korea.
Music Cow, which has been selling products without filing a securities declaration, will be subject to sanctions such as restrictions on issuance of securities and imposition of fines for negligence. However, the SSC suspended the sanctions for six months, considering △the first application of investment contract securities, low awareness of the illegality, and △the number of subscribers approaching 1 million (170,000 actual investors) already using the service. decided to do
However, Music Cow must prepare measures to strengthen investor protection within this period and report the results to the Financial Supervisory Service. The SSC will provide Music Cow to △ protect the rights and property of investors from the risk of Music Cow going bankrupt; requested, etc. A Music Cow official said, “We will quickly complete all standard conditions within the grace period.”
As a result of the SSC’s decision on this day, it is expected that the sculpture investment (a method in which several investors jointly invest by dividing high-priced assets such as real estate, art, and livestock in the form of shares) with a business structure similar to that of Music Cow is expected to be affected in the future. In the future, the industry expects that the institutional reform and management and supervision related to sculpture investment will begin in earnest.
In fact, on that day, the Financial Supervisory Service started management supervision, such as issuing a ‘caution’ level consumer alert in relation to the piece investment service. The Financial Supervisory Service said, “There are cases in which a piece investment business operator does not provide sufficient information regarding the management structure or investment risk to investors. is required,” he said.
Park Joo-hee reporter [email protected]
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