Kakao Pay Securities wins investment dealing license, moving beyond brokerage

Kakao Pay Securities announced Monday that it has obtained a license for investment dealing in securities.

Financial regulators approved the company's application July 1 to add an investment dealing unit (category 1-1-1, securities) to its registered financial investment business. The approval gives Kakao Pay Securities the authority to directly underwrite, deal in and sell securities, going beyond its previous role as a broker.

The license is expected to serve as a turning point linking the company's retail and investment banking operations, two areas where it has built competitive strength. Having accumulated a retail user base centered on brokerage services, the firm can now use its own capital to underwrite and supply products, creating a structure in which the two business lines reinforce each other.

The area generating the most immediate interest is IPO underwriting. With underwriting now permitted, the legal foundation for a public offering subscription service is in place, and the company views it as a key link connecting investment banking and retail while drawing in new users.

The approval also broadens the product lineup available to retail customers, including retail bond trading and fractional share trading in domestic and overseas markets. The company can now diversify its revenue streams through its own capital as well — expanding its sales and trading operations, participating as a liquidity provider for ETFs and broadening its bond management activities.

"This investment dealing license has laid the groundwork for us to move forward as a full-service securities firm that directly underwrites and supplies products, going beyond brokerage," Kakao Pay Securities CEO Shin Ho-cheol said. "We will create differentiated synergies unique to Kakao Pay Securities."

Kakao Pay Securities has been on a steep growth trajectory, with assets under custody surpassing 20 trillion won ($13.3 billion) as of the end of May. That milestone came just 29 trading days after custodied assets crossed 15 trillion won on April 17, driven by broad-based expansion across domestic shares, overseas shares, pension savings, ISA accounts, funds and deposits.