이 기사는 2021년 09월 16일 08:06 thebell 에 표출된 기사입니다.

South Korea’s mobile payment app operator Kakao Pay’s planned initial public offering (IPO) is likely to be delayed, amid toughened regulations on fintech services by dominant platform operators.

Kakao Pay and its underwriters are continuing discussions with the Financial Supervisory Service (FSS) over how to revise its IPO prospectus. They are reportedly eyeing on the changes in the financial authorities’ stance instead of actively expressing their views as the financial authorities' perspective has become the most important variable in the planned IPO.

The mobile payment app operator has agreed with the fact that it needs to revise its prospectus after the Financial Services Commission (FSC) and the FSS went against platform companies, claiming that selling financial products on online platforms goes against the Financial Consumer Protection Act.

Under the Capital Market Act, a prospectus takes effect 15 business days after it is submitted. During this period, the FSS may review and order to revise the submitted prospectus.

Kakao Pay specified KakaoPay Securities as the provider of its fund investment-related services and temporarily suspended brokerage and sales of some insurance products to comply with new rules. The firm plans to decide later whether to reopen the suspended services after going through discussions with the financial authorities.

The suspension of the services itself is unlikely to hurt Kakao Pay’s IPO valuation as the suspended insurance services reportedly account for less than 10% of Kakao Pay’s total revenue.

But the problem is that there will be limited time for various stakeholders to reach an agreement on the interpretation of the new regulations as the Chuseok holiday falls before the effective date.

The effective date of the Kakao Pay’s prospectus submitted on August 31st is September 25th. Considering that it the 25th is Saturday, it was scheduled to take effect on the 27th. Including the time required to write a new prospectus, the company will need to come up with an outline for the revision within this week.

“There is not enough time to collect opinions from the financial authorities on Kakao Pay's proposed plan,” said an industry source. “It won’t be easy to go for a simple revision before the financial authorities' stance is confirmed.”

Also, it might be better for Kakao Pay to take a more cautious stance for its future IPO process given that the company already postponed its IPO once over overvaluation issues.

It could also be appropriate for the payment platform company to reduce risks by lowering IPO price and pushing back the IPO schedule to keep the investor sentiment bullish because it still has plenty of time to make its market debut within this year. (Reporting by Seok-cheol Choi)