Starting July 22, newly listed corporations must disclose additional reports for the previous quarter or semiannual reports within five days from the date they are required to submit their business reports. Additionally, when issuing private convertible bonds, a key issues report must be disclosed at least one week prior to the payment date.
The Financial Services Commission noted on the 21st that the amended Capital Markets and Financial Investment Business Act and subordinate regulations containing these details will take effect starting July 22.
In the past, corporations that incurred an obligation to submit business reports upon new listing disclosed the business reports for the previous fiscal year within five days (if the obligation to submit arose during the regular business report submission period, up to the submission deadline).
However, due to the absence of a requirement to disclose previous quarter or semiannual reports, it has been pointed out that adequate information regarding the business or financial condition prior to listing could not sufficiently be provided to investors.
Starting July 22, corporations required to submit business reports for the first time must disclose not only the previous year's business report but also the previous quarter or semiannual report within five days.
Previously, if the board of directors of a corporation required to submit business reports decided to issue private convertible bonds, it was required to disclose a key issues report by the next day. Consequently, there were many instances where the issuance was disclosed just before the payment date. If a corporation's issuance of private convertible bonds or warrants violated the law, shareholders often lacked sufficient time to request a stop to the issuance under commercial law.
Starting July 22, corporations required to submit business reports must disclose a key issues report by whichever date comes first: the day after deciding to issue private convertible bonds or one week prior to the payment date.
The Financial Services Commission stated that it expects this amendment to the Capital Markets Act to minimize blind spots in corporate disclosure and contribute to the advancement of capital markets and investor protection. The Financial Services Commission noted, "To facilitate the smooth implementation of the amended Capital Markets Act and assist corporations in fulfilling their disclosure obligations, we will continuously guide them on the improvements made to the system."