KOREAN REPUBLIC: FSS publishes updated Korea major shareholdings guidance

Wednesday April 23 2014

The Korean Financial Supervisory Service (FSS) has published a detailed guide to foreign investors to help them better understand Korea’s disclosure regimes for large share ownership in listed companies known as the “five percent rule” (Korea major shareholdings).

The “Guide to Equity and Short-Swing Profit Disclosures in Korea” is a revised version of the first edition which was published in 2005, and reflects changes in the five percent rule in accordance with the enactment of Financial Investment Services and Capital Markets Act. It covers the following:

• Securities Covered under the Five Percent Rule
• Persons Covered under the Five Percent Rule (including Specially Related Persons, joint holders, legal and beneficial ownership),
• Disclosure period and triggering events
• Calculation of positions
• Disclosure Forms and Items
• Sanctions and Penalties against Noncompliance
• FAQs – including the disclosure requirements, reportable securities, equity ownership calculation and examples, purpose of equity ownership, supporting documents for disclosure, and using DART for electronic filing.

The document also covers disclosure regimes for insider equity ownership and short-swing profit provisions. The guide provides English-translated disclosure forms for informational purpose.

Click on the above link for the guidance.