All Listed Firms to Disclose Treasury Stock Details Under New Rules

SEOUL, June 23 (Yonhap) -- The country's financial regulator said Tuesday that all listed firms will be required to disclose details on their treasury stocks following the Cabinet's approval of a revision to the Commercial Act enforcement rules.

The change 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 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 regulations, 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.

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

Also, all listed firms are banned from selling bonds exchangeable into their treasury stocks.

The revision will take effect on June 30, according to the FSC.

In the first five months of the year, some 43 trillion won (US$28 billion) worth of treasury stocks have been canceled, more than doubling from last year's 21.4 trillion won in total.

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.