South Korea’s Financial Services Commission (FSC) issued a preliminary notice of amendments to the Enforcement Decree of the Financial Investment Services and Capital Markets Act and related regulations to tighten listed companies’ disclosure obligations on the acquisition, disposal and cancellation of treasury stocks, and to enable tougher sanctions for repeated disclosure breaches. The proposal would lower the disclosure threshold from 5 percent to 1 percent of issued shares and require disclosures twice a year (in annual and semi-annual business reports) rather than once a year. Companies would also have to report a comparison of previously announced treasury stock plans against actual execution over the following six months, and explain deviations of 30 percent or more. In addition, the changes would establish a basis for aggravated penalties for recurrent rule-breaking, including measures such as recommendations to remove executives, restrictions on issuing securities, penalty surcharges and criminal punishment. Public comments are open from September 26 to November 5, after which the FSC plans to proceed through legislative review and government approval, with the amendments expected to take effect in the fourth quarter of 2025.
South Korea Financial Services Commission 2025-09-25
South Korea Financial Services Commission proposes 1% threshold and stronger enforcement for listed companies’ treasury stock disclosures
South Korea's Financial Services Commission proposed amendments to tighten disclosure obligations for listed companies regarding treasury stocks, lowering the disclosure threshold from 5% to 1% of issued shares and requiring biannual reporting. The changes introduce stricter penalties for repeated disclosure breaches, including executive removal recommendations and criminal punishment. The amendments are expected to take effect in Q4 2025 following legislative review and government approval.