As early as May 20th, multiple subscriptions through multiple securities companies will be restricted for public offering stock subscriptions.
The system that compulsory allocating 20% of the public offering volume to the employee stock ownership association (union) when IPO in the securities market is eased. If the union wishes to allocate less than 20%, an exemption from compulsory allocation for the remainder is granted.
In addition, a regulation to block information exchange, a so-called Chinese Wall, will be introduced, centered on the principle of respecting the autonomy and accountability of financial investment companies.
The Financial Services Commission announced on the 11th that it would announce the legislation by the 20th of next month on the’Amendment to the Capital Markets Act Enforcement Decree’ containing these details. The Financial Services Commission plans to implement it on May 20 after regulatory and legal review.
The amendment made it possible for Securities Finance to establish a system for confirming duplicate subscription of public offering stocks to check whether investors have duplicated subscriptions, and to prevent duplicate subscriptions from being duplicated for subscribers who have been confirmed to have duplicate subscriptions.
A subscriber whose duplicate subscription is confirmed is recognized as valid only for the first subscription received regardless of the number of subscriptions.
SK Bioscience’s general public offering stock subscription, which was held from the 9th to the 10th, had 2.4 million accounts subscribed to all six subsidiaries, resulting in a total margin of up to 63.6 trillion won. Due to the overlapping subscription, a congestion of subscriptions has arisen.
Currently, securities-listed companies are obligated to allocate 20% of the offering volume at the time of IPO, so if the union does not want to be allocated up to 20%, the allocation to the union is completed and the unsubscribed quantity is determined, and then it is allocated to other investors. In this way, the system was operated rigidly.
However, in the amendment, if the employee stock ownership association wishes to allocate less than 20% of the public offering volume in advance, it is decided to admit an exception to the mandatory allocation for the shortage of the desired quantity.
The amendment also included the establishment of a Chinese wall, a device for blocking information exchange by financial investment companies, for each information unit.
Until now, financial investment companies have blocked information exchange by setting up a Chinese wall between businesses such as corporate finance business, proprietary property management business, and financial investment business.
The revised bill stipulates that the information subject to interception of exchanges is’undisclosed important information’ and’information on customer asset trading and management, etc.’
Instead, it established and operated an autonomous discipline system centered on internal control standards related to blocking information exchange.
The internal control standards will include blocking methods, exceptions related to exchanges, and types of transactions concerned with conflicts of interest and countermeasures.
The company is obligated to appoint an executive-level person in charge to oversee the operation of the internal control standards and to disclose the main contents.
In addition, the revised bill converts the principle of pre-reporting for concurrent business operations to post-report. In the case of reports of concomitant business affairs, the Financial Services Commission announces the name of the reporting company, the reporting date and posting date of the concomitant business affairs, and the business details, and orders for restrictions and correction When imposed, the contents and reasons were announced.
In addition, it increased the convenience of investors by allowing the method of expressing investors’ intention, which was previously only accepted in writing, to be expanded to phone, fax, and e-mail.