Korea will require Kospi-listed companies with at least 2 trillion won ($1.4 billion) in assets to file key regulatory disclosures in English next year, with the mandate expanding to all Kospi firms by 2028, the nation’s top financial regulator said.
Beginning in May, large Kospi companies will need to provide English-language filings on dividends, rights offerings, treasury share cancellations and other major events, according to the Financial Services Commission.
The move is the second stage of a three-phase rollout aimed at improving access for foreign investors and addressing the devaluation of Korean stocks.
The first phase was enacted in January 2024, requiring companies of over 10 trillion won in assets with over 5 percent of the shares owned by foreign investors, as well as corporations with over 30 percent foreign ownership in the case of those with over 2 trillion won in assets, to publish key disclosures in English.
The third and final phase of the plan will begin in 2028, although the exact timeline has yet to be determined. All Kospi-listed companies will be required to provide disclosures in English by then.
Under the scheme, 265 companies listed on the Kospi will fall under the mandate in the second phase, and 848 companies are expected to be included in the third phase. The figures may change at the time of implementation, depending on the total number of listed companies.
"We set a roughly two-year interval for each phase because there are many stakeholders involved as the rollout progresses," an official from the FSC said at a press briefing held Friday.
"The companies included in the first phase are, in a way, the most capable of complying. It would take more time for the later-stage companies to adopt the new requirements.”
While companies were previously required to submit their English disclosures within three days of their Korean filings, those with assets of 10 trillion won or more will be required to submit the English version on the same day starting in May. Companies with assets above 2 trillion won will continue to have a three-day window.
The scope of English disclosures will also be broadened in May. Currently, English disclosures cover only a portion of the 55 items categorized as "major affairs of management" by the Korea Exchange. But the coverage will be expanded to include all items from May.
Alongside the plan to strengthen English disclosure, the regulator also introduced other measures to enhance foreign investors’ access to capital markets and improve shareholder rights.
From March, companies will be required to disclose voting results for each agenda item at shareholder meetings, including approval rates, to enhance transparency. The FSC explained that the practice is the norm for capital markets in other advanced economies.
While nearly 90 percent of Kospi-listed companies hold their annual general shareholder meetings in March, regulators will provide incentives for companies that schedule their meetings in April to prevent overlaps.
Regulators will also require companies to disclose more detailed information on compensation standards for their executives in semiannual reports from next year.
silverstar@heraldcorp.com
