New disclosure measures for foreign securities issuers.
Amid growing interest among foreign companies to make public offerings or list in Korea, the Korean government took steps to fine-tune disclosure regulations on foreign securities issuers toward global standards. The government will adopt several globally accepted investor protection measures in response to public stock offering plans by foreign entities that are incorporated as holding companies offshore in places such as Bermuda and Cayman islands.
According to new measures, financial and non-financial disclosures are to be provided on a consolidated basis for the subsidiary units of offshore holding companies. This is designed to ensure appropriate disclosures on the business activities of subsidiary units that effectively represent the activities of the holding company.
In addition, disclosures on the corporate governance structure of offshore holding companies (including applicable laws and key provisions of the articles of incorporation), differences with local governance systems and practices, and major activities of the board of directors of the subsidiary units and related information are to be provided to investors.
Moreover, explanations on key legal and regulatory provisions relating to the places of the incorporation of offshore holding companies and the subsidiary units along with legal risks the companies face are to be disclosed. These disclosures are to be accompanied by separate legal opinions from licensed local and offshore attorneys as to the accuracy of the disclosures and the legality and the suitability of securities issuance in Korea.
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|Title Annotation:||Economic News Briefing|
|Publication:||Economic Bulletin (Korea)|
|Article Type:||Brief article|
|Date:||Feb 1, 2007|
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