For leading a financial Big Bang in the capital market by stimulating financial innovation and competition, the Korean government is working on the establishment of Capital Market and Financial Investment Services Act which will consolidate the existing capital market related acts. One of the main points of this act is to regard financial products with possibilities of losing a part of the principal as ``financial investment products``. Another main point is that a financial investment company is allowed to manage all six financial investment businesses(investment transactions, investment intermediation, collective investments, investment commitments, investment consulting and trust businesses). Also the Act extends the scope of investment business. For example, the Act allows financial investment companies to join the micro-settlement system of Korea Financial Telecommunications & Clearings Institute and this will greatly improve the convenience of the securities account, which until now was bound to provide only basic services. Finally the Act is upgrade the investor protection mechanism. For example, financial investment companies are required to receive clients`` signatures which confirm that clients are well informed of the details of the investment products when they sell investment products. Though the scope of this legislation is yet limited to the capital market and the securities industry, requests will be growing that banking and insurance industries should adopt the same regulation system. On the other hand, the business scope extension in securities industry is likely to causes more competitions among the industries and consumers in banking and insurance industries may claim more strict consumer protections in their areas. Because nowadays many securities companies are belong to financial groups, all the financial companies in a financial group will enjoy synergy effects by turning a securities company into a financial investment company. One of the worries regarding the Act is related with allowing financial investment companies to join the micro-settlement system. In spite of all the carefully designed systemsafety- purposed devices, overall risks of micro-settlement system due to the entrance of the securities companies are estimated to be increased slightly. For the banking industry, this legislation will be the chance to diversify banks`` income structures and increase their customers. However, the trust business in bank can be shrunken as the financial investment companies can run the trust business as a main business. For the insurance industry, the Act will help to improve the asset managing environment and escalate the possibility of joining the micro-settlement system, but competitions will also be growing because some business area can be overlapped. Clearly the securities industry will enjoy many benefits from the Act. First of all, the role and scale of the capital market will be enlarged and capital market related financial institutions can be large enough to compete with international investment banks such as Merrill Lynch through the capital increase and M&As. Competitiveness of investment products will grow and business grounds for the financial investment companies will be strengthened by offering comprehensive financial services. However, there is a good possibility that foreign investment companies can erode the new profitable market with advanced financial technique, skilled experts and sufficient capitals. For minimizing the adverse effects and maximizing the positive effects, the methods of financial supervision should be adjusted. The confusion caused from the co-existence of institutional regulations(banking and insurance industry sectors) and functional regulations (securities industry sector) can be eliminated by changing the supervisory organization in the way that institutional regulations are supplemented by functional regulations. Also the balances between the securities industry supervision and banking/insurance supervision should be considered to get rid of possible discriminations caused by different regulation systems.