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|
 Disclosure
in the Secondary Market |
Disclosure in the secondary market, via
an electronic disclosure system, is characterized
by periodic！annual, semiannual and quarterly！reports
and by ongoing disclosures on any material
information affecting share prices.
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Since December 1999, all companies (KRX-listed and FSC-registered) having over
500 shareholders are required to disclose
four reports annually！two quarterly, one semiannual
and one annual. |
| Periodic
Reports |
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Under the Commercial Code (the Code), a corporation
must make public its annual report. This report
must include a financial statement, business
report and audit report.
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Once the financial statements have been approved
at the annual shareholders meeting, the balance
sheet must be published in a major newspaper.
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A corporation, according to the Act, must
file an annual report with FSC and KRX within ninety days of the fiscal year-end;
for semiannual and quarterly reports, within
forty-five days.
Corporations with total assets of less than 2 trillion won are exempt from filing quarterly reports.
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If a corporation, even once, fails to publish
an annual, semiannual or quarterly report,
KSDA or KSE will designate its shares as an
alert issue. If such failure continues for
two consecutive periods, delisting may follow.
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The following corporations must file audited
reports: |
， Domestic or
foreign corporation that is KRX-listed
， Corporation with KRX-listed warrants or
non-guaranteed corporate bonds
， Foreign corporation with listed Korean depositary
receipts
， Unlisted corporation registered with FSC
for listing on KRX
， Corporation registered with FSC having 500
or more shareholders |
| Ongoing
Disclosure |
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To ensure fair trading and investor protection,
the KRX may request a listed corporation
to clarify related news or to verify rumors
and to make disclosure if its share price or
turnover shows unusual movement without apparent
cause.
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| Fair
Disclosure |
|
As part of stock market reform plans, the
Fair Disclosure (FD) Rules were enacted in
November 2002. This rule requires that, before official release, companies
disclose information about their business
to all market participants, not just to
major investors or analysts.
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Such information includes a company's earnings,
issue of new shares, foreign
investment, M&As, spin-offs, winnings
of large-scale contracts, etc. |
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The Rule aims to address the information asymmetry between retail and institutional
investors. Now, the FD rules are implemented
with the KRX disclosure regulations. |
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