Seoul: The country's financial regulator announced Monday that all listed firms will be mandated to disclose details about their treasury stocks following the revision of the Commercial Act.
According to Yonhap News Agency, the National Assembly approved the revision of the Commercial Act in late February. Under this revision, all listed firms are now required to cancel treasury stocks within a year of their purchase and must retire existing treasury stocks within 18 months. Previously, only companies holding treasury stocks exceeding 1 percent of their shares in circulation were obligated to disclose their holdings and usage plans.
The revised rule mandates that all listed firms disclose the number of own shares they hold and their plans for cancellation, as stated by the Financial Services Commission (FSC). The FSC also mentioned it would update related regulations to support the Commercial Act's revision. Additionally, if firms intend to use part of their treasury stocks as compensation for employees, they must obtain shareholder approval before disclosure.
The Lee Jae Myung administration has been advocating for a series of measures aimed at enhancing corporate governance, broadening the fiduciary responsibilities of boards to all shareholders, and bolstering protection for minority investors.