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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Minyoung] Starting in July, insiders such as company owners or executives of listed companies will be required to disclose stock transactions 30 days in advance.
The Financial Services Commission (FSC) announced on the 30th that from July 24th, a pre-disclosure system for insider trading will be implemented to protect general investors and prevent unfair trading. This is part of the revised Capital Market and Financial Investment Services Act.
According to the amendment, directors, auditors, and de facto executives (such as those responsible for business execution) of listed companies must disclose the purpose, price, quantity, and period of planned transactions at least 30 days before trading equity securities, including preferred shares, convertible bonds, bonds with warrants, and related depository receipts.
Individuals who own more than 10% of voting shares or exercise substantial influence over major management matters, such as the appointment of executives, are also included.
However, transactions that involve less than 1% of the total issued shares of the listed company and are worth less than 5 billion KRW in total over the past six months are exempt from the reporting obligation. Additionally, transactions conducted according to legal requirements, tender offers, acquisitions, and disposals due to mergers and demergers are exempt from the pre-disclosure obligation.
Violations of the system, such as failure to disclose, false disclosure, or non-compliance with the trading plan, can result in fines of up to 2 billion KRW. Detailed regulations will consider market capitalization, transaction amount, and the severity of the violation to determine the fines.
To prevent confusion after the system's implementation, the FSC has designated a "guidance period" from July 24 to August 22, during which transactions can occur without submitting a trading plan.
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
