(123rf)

Proposed bill: Partial Amendment to the Financial Investment Services and Capital Markets Act

Proposed by Rep. Lee Wong-woo (Democratic Party of Korea)

To prevent the exploitation of callable convertible bonds (CB) for deceptive gain and power, this amendment prohibits stock-listed corporations from selling the call options of the CB or bonds with warrant (BW) to their largest shareholder or affiliated persons. It also requires corporations to retire a CB obtained before its expiration date. Moreover, this amendment imposes a penalty of imprisonment with labor for not more than one year or a fine not exceeding 30 million won ($22,700) for any breaches of these regulations.

Proposed bill: Partial Amendment to the Financial Investment Services and Capital Markets Act

Proposed by Rep. Kim Han-kyu (Democratic Party of Korea)

Currently, the Securities and Futures Commission notifies stock-listed corporations of any discovered short-swing profits on stock transactions, which the relevant corporation must disclose on its website. The corporation also has the right to request the return of the short-swing profit from the beneficiary, but the collection rate remains low due to the non-mandatory nature of the right. Therefore, this amendment mandates stock-listed corporations to retrieve any short-swing profits from their executive officers, employees, or major shareholders. Moreover, it imposes a penalty of imprisonment with labor for not more than one year or a fine of more than 30 million won for failing to disclose notifications from the Securities and Futures Commission.

Pending bill: Partial Amendment to the Financial Investment Services and Capital Markets Act

Proposed by Rep. Yun Chang-hyun (People Power Party)

Due to the recent advancements of online transaction platforms, the creation of an online distribution market for the transaction of atypical securities, including investment contract securities, has become possible. To ensure the consistent application of this act’s distribution system to all categories of securities, this amendment recognizes security tokens based on distributed ledger technology as a type of digitalized securities and subjects the relevant markets, including the issuance and distribution of such securities, into the act’s scope of application.

Promulgated bill: Act on Developing and Using Station’s Sphere of Influence

Competent Authority: Ministry of Land, Infrastructure and Transport

This amendment improves and supplements operational deficiencies in the current system by improving the process of collecting opinions from local residents, which is required to designate a development area, and by including the relocation or installation expenses of railroad facilities in a project to develop the station's sphere of influence in the costs for reinvestment of gains from the development.

Administrative announcement: Partial Amendment to the Enforcement Decree of the Asset-Backed Securitization Act

Competent Authority: Financial Service Commission

This amendment reflects the changes introduced in the Asset-Backed Securitization Act to its enforcement degree and makes improvements to operational matters. It specifies the requirements for corporations qualified to issue asset-backed securities as corporations with at least 50 billion won in assets, an impaired capital rate below 50 percent, and a qualified audit opinion.

The Korea Herald republishes a weekly legislative report by local law firm DR & AJU LLC to provide the latest information on bills approved, proposed, pending and set to be promulgated. -- Ed.

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