Investor Education:

1
Investor Education Koreas Experience
Presented by
Kun Ho Hwang
Chairman
2
Investor Education Koreas Experience
- Contents -

• Koreas Capital Markets of Today
• Efforts to Broaden the Demand Base
• Introduction of KCIE
• Investor Education Initiatives
• Investor Education Results
• Future Vision for Investor Education
• Closing Remarks

3
Investor Education Koreas Experience
Koreas Capital Markets of Today
? Fast Market Growth Concurrent with its
Economy - Trading value
13th, Market Cap 14th (as of July 2007) -
KOSPI200 Option 1st, KOSPI200 Futures 5th
(2006) - Viewed as a promising market
1
4
Investor Education Koreas Experience
Efforts to Broaden the Demand Base
? Amendment of Pension Fund Management Act
(2004) - Allows National Pension to freely
invest in equity ? Introduction of Corporate
Pension Plan (2005) - Similarly to U.S.
401(k) pension plans ? Capital Markets
Consolidation Act (July 2007) - U.K. and
Australian legislation as benchmarks -
Dramatic deregulatory measures ? Emphasis on
Investor Protection ? Increased Need
for Investor Education
2
5
Investor Education Koreas Experience
Introduction of KCIE
? Establishment - Established to promote
more efficient and systematic investor
education (June 2005) - U.S. (private), UK
(public) benchmarks adapted to Korean
investor education model (public/private)
3
6
Investor Education Koreas Experience
Introduction of KCIE (cont.)
? Members - Comprised of 9 organizations,
including KSDA, Financial Supervisory
Commission (FSC), Financial Supervisory
Service (FSS), and Korea Exchange (KRX)
- KSDA serves as Secretariat Manages
general/administrative affairs - 8 regional
councils ? Nationwide network formed
4
7
Investor Education Koreas Experience
Investor Education Initiatives
? World-class Education Services - Developed
a variety of educational content - Worlds
best comprehensive online education programs
- Published textbooks for elementary secondary
schools ? Tailor-made Education Programs -
Provided age- and profession-specific onsite
programs - Adopted up-to-date educational
techniques - CEOs participation as guest
lecturers
5
8
Investor Education Koreas Experience
Investor Education Initiatives (cont.)
? Financial Education to Social Minorities -
Provided education to present as well as
potential investors - Expanded
programs to include financially
disadvantaged and other social minorities
? Ultimately, investor education addressing all
Koreans
6
9
Investor Education Koreas Experience
Public Awareness Campaigns and PR Activities
? Utilized to Spread the Long-term, Direct
Investment Launched in Cooperation with
State Media ? Ex. Buy 10 Shares, Saving
Through Stock Investment Campaigns ?
Designed to Redirect Investors Speculative
Habits Toward More Sound Investment
Activities
7
10
Investor Education Koreas Experience
Investor Education Results
? Long-term, Indirect Investment Culture -
Equity-type Funds USD8 bn (Dec 2005)
? USD 87 bn (Jul 2007) ? Funds Virtuous Circle
? Renaissance of Korean Capital Market ?
One of the Best Investor Education in the World
8
11
Investor Education Koreas Experience
Investor Education Results (cont.)
? Market Participants Proportion Changed to
Desirable Direction - Proportions by
Holdings Individual Investors
20(03) ? 18(06) Institutional
Investors 17(03) ? 22(06)
Foreign Investors 44(04) ?
33(07) ? Price Volatility Reduced
9
12
Investor Education Koreas Experience
Future Vision for Investor Education
? Provide World-class Investor Education
Services ? Advance the Financial Capabilities of
Koreans ? Extend Scope to Include Investor
Protection Worlds Top
Investor Education
10
13
Investor Education Koreas Experience
Closing Remarks
? Korean Investor Education Initiatives Proven
Successful ? Necessity for Cooperation Across
National Borders ? Korean Experience as a
Reference for Emerging Markets
11
14
Investor Education Koreas Experience
Thank you!