Changes to disclosure requirements.

(From The Korea Herald)

By Tom Chung Amendments to the disclosure requirements for companies listed on the Korea Stock Exchange and Kosdaq will come into effect beginning Oct. 1. Major changes include a decreased number of disclosure items along with shortened reporting deadlines, requirements for more detailed disclosures, establishment of a review committee, establishment of a penalty point system and other steps to prevent and identify disclosure violations. Under the new system, the items subject to the prompt disclosure requirements will be reduced from 280 to 236 in the case of the KSE, and from 270 to 229 for the Kosdaq, but will require further detailed disclosure. Disclosure deadlines will be correspondingly shortened in order to protect investors by lessening the chance of insiders taking advantage of the lengthy periods before reporting. The criteria for disclosure relating to shareholder's equity will also undergo changes to require disclosures for: a) extraordinary gains or losses and capital investments that amount to at least 10 percent of shareholder's equity; b) stock transactions that are 5 percent or more of shareholder's equity in size; c) loans, debt and guarantees that amount to at least 3 percent of shareholder's equity for KSE, and 5 percent of shareholder's equity for Kosdaq; and d) fines, penalties and contributions equal to or greater than 1 percent and 3 percent of shareholder's equity for the KSE and Kosdaq, respectively. The changes implemented are expected to enable better disclosure of events that may affect shareholder's equity, which is viewed as a better measure a company's risk exposure compared to disclosures that concentrate only on the level of a company's paid-in-capital.

Other amendments include changes to applicable sanctions imposed that will mirror the severity of the violation, in addition to the number ...