SEOUL - Starting next year, some investors in South Korea will have the opportunity to buy stocks with prior knowledge of dividend payouts. This change, announced by officials on Tuesday, is expected to provide greater transparency and decision-making ability for investors.
According to Yonhap News Agency, the Financial Supervisory Service (FSS), out of 2,267 listed firms in South Korea, 636 have completed preparations to adapt to this change in the dividend payment system. Traditionally, the last day of each year is marked as the ex-dividend date for most listed firms, with the dividend amounts declared later in the following year. This system meant dividends were paid to shareholders who held shares before the ex-dividend date, often without clear knowledge of the dividend amount.
With the new system, these 636 firms will first decide on the dividend size and then set their ex-dividend dates. This arrangement allows new investors to buy shares with an understanding of the expected dividends. The FSS views this change as a crucial step in enhancing investor rights and aligning with global standards. The FSS encouraged more companies to join this initiative by revising their regulations.