Disclosure rules on treasury stocks to be strengthened

treasury stocks-disclosure regulations

Disclosure rules on treasury stocks to be strengthened

SEOUL, March 30 (Yonhap) -- The country's financial regulator said Monday that all listed firms will be required to disclose details on their treasury stocks following the revision of the Commercial Act.

The revision of the Commercial Act was approved by the National Assembly in late February, under which all listed firms are required to cancel treasury stocks within a year of their purchase, and also retire their existing treasury stocks within 18 months.

Previously, only the firms that hold treasury stocks exceeding 1 percent of their shares in circulation were required to disclose how many stocks they held and how they planned to use them.

Under the revised rule, all listed firms will be required to disclose how many own shares they hold and how they will cancel them, the Financial Services Commission (FSC) said, adding it will revise related regulations to back up the revision to the Commercial Act.

Should they plan to use part of their treasury stocks as a means of compensation for their employees, they must get a nod from shareholders before disclosure, according to the FSC.

The Lee Jae Myung government has been pushing for a series of steps to improve corporate governance, extend the fiduciary duty of boards to all shareholders and strengthen protection for minority investors.

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