The Financial Services Commission FSC announces on July A partial amendment to 9 is made. “Enforcement Decree of the Financial Investment Services and Capital Markets Act” The approval was made at the Cabinet meeting


In 2021 Kakao Pay The following are some of the most effective ways to increase your ROI: Ryu Young-jin, along with other executives, sold their stock options following the company’s initial public offering. They made hundreds of billions in profits. This sparked a controversy about stock dumping. In As a response to such incidents the Financial Services Commission FSC announces on July A partial amendment to 9 is made. “Enforcement Decree of the Financial Investment Services and Capital Markets Act” The approval was made at the Cabinet meeting. This The amendment that specifies the details for the pre-disclosure of insider trading by listed companies will come into effect on July 24.


The new regulation mandates that executives or major shareholders of listed companies must disclose block deals—large-scale transactions outside of regular trading hours—one month in advance. This Measures aims to prevent “stock dumping” As seen in the chart, there are a number of incidents that can cause stock prices to fluctuate significantly. Kakao Pay case. Insiders The purpose, price and quantity of the transaction, as well as the time period, must be disclosed 30 days prior to the scheduled date of the transaction for significant transactions. Significant transactions are defined by the government of Korea as transactions worth more than 5 billion won ($3.7 million), or dealings with more than 1% of the company’s total shares.


The Minority shareholders are protected by a pre-disclosure scheme. Major A large number of shares sold by shareholders who are familiar with the situation of their company is interpreted as a sign of a peak in stock prices. There In some cases, the stock price has plummeted after major shareholders have sold their shares. This can cause damage to minorities.


HoweverThere are serious concerns that the predisclosure system may hinder the recruitment or strategic investors (SIs). Confidentiality It is important to avoid stock prices plummeting or lower than expected sale prices when you are doing block deals. For example, Delta Air Lines, which owns a 14.90% stake Hanjin KAL is a white-colored knight. Hanjin Group Owner family would be required to disclose block deals in advance under the new system.


A representative from a publicly listed company said: “Requiring pre-disclosure for block deals is essentially blocking transactions where confidentiality is crucial,” adding, “Since it can also hinder the recruitment of strategic investors (SIs), supplementary measures are necessary.”


Transactions Exemptions from pre-disclosure obligations include inheritance, stock dividends and mergers & acquisitions via stock transfers. Financial Investors, including pension funds are excluded from the obligation to disclose in advance.


As The amendment will take effect from July The FSC strives to achieve a balance in protecting minority shareholders while maintaining the stability of the market. HoweverThe concerns raised by the companies point to the need for a continuous dialogue and possible adjustments in order to make sure that the new regulations don’t unintentionally stifle corporate governance and strategic investments.

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