SEOUL, Nov. 29 (Korea Bizwire) — South Korea’s financial regulator said Tuesday that it will exempt Musicow Inc. from punishment as the music copyright trading platform has carried out all required steps to improve investors’ protection.
“It has been confirmed that Musicow has carried out all conditions for business overhaul required by the Securities and Futures Commission,” the Financial Services Commission (FSC) said in a press release.
In April, the FSC categorized Musicow as a platform for securities trading, the first such rule for the so-called fractional investment. It means that the fintech startup should be under same regulatory monitoring as such investments as stocks.
It could also face punishment for “unauthorized” operation. The regulator, however, gave a six-month grace period for Musicow to improve its business structure and investors’ protection
Launched in 2016, Musicow allows investors to buy and sell a portion of music copyrights and claim fees based on their ownership size. It had been quite popular, drawing around 170,000 users, most of whom were younger people.
The Musicow case drew keen attention because of potential impact on other fractional investing services that have been springing up in various fields, including music, art, real estate and many other types of assets.