Wednesday June 5 2024

News Source: Global Exchanges

Focus: Stock Exchange Regulation

Type: General

Country: Korean Republic


On 3rd June 2024, the Financial Services Commission (FSC) issued a preliminary notice of proposed rule changes concerning treasury stocks of listed companies. This proposal is a follow-up to the previously introduced plan to upgrade rules on treasury stocks of listed companies, which was unveiled on January 30, 2024. The reform proposal will bring about changes to the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) and its subordinate regulations on the issuance and disclosure of securities, and it will be available for public comment from June 4 to July 16.

The proposed rule changes are intended to

  • restrict allocation of new shares to treasury stocks when companies spin-off business units,
  • strengthen disclosure duties throughout the course of acquiring, holding, and disposing treasury stocks, and
  • close loopholes and remove regulatory arbitrage in the process of acquiring and disposing treasury stocks.

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