Financial Supervisory Service As the integrated supervisory authority, the FSS oversees financial services firms across
the entire financial sectors.


Disclosure for Listed Companies

The FSCMA provides for two general types of disclosures of listed companies. One is the periodic disclosure that companies file with the FSC/FSS on a quarterly, semiannual, and annual basis during each accounting period. The other is material disclosure, which companies must file with the FSC/FSS for any event that has a material effect on investors or their investment decision. The Korea Exchange, a self-regulatory organization, also enforces its own disclosure rulesㅡmaterial business disclosure, inquired disclosure, and fair disclosureㅡto ensure smooth and orderly trading.

Periodic Disclosure

Periodic disclosure refers to business reports that listed companies must file with the FSC/FSS on a quarterly, semiannual, and annual basis each year on their business operations, financial conditions, and management for public disclosure. The express aim of the periodic disclosure regime is to help investors make informed investment decisions, to contribute to fair and reliable price formation, and to help maintain fair and orderly markets. The annual business report is filed within 90 days after the end of the accounting period, while the quarterly and semiannual business reports are filed within 45 days following the end of the accounting period.

Companies that are subject to periodic disclosure include: (1) those whose shares are listed and traded at the Korea Exchange, ; (2) those that have issued on the KOSPI Market or KOSDAQ Market or KONEX Market shares and other equity rights or claims, unsecured bonds, convertible bonds, bonds with warrants, participating bonds, exchangeable bonds, preemptive rights, depositary receipts, or structured derivatives; , and (3) those subject to FSC/FSS designation of independent external auditor as provided for under article 2 of the Act on External Audit of Stock Companies.

Companies that are unable to issue a business report because of bankruptcy or dissolution or are involuntarily delisted from the stock exchange are exempt from filing a business report.

Consolidated Financial Reporting

Companies that are subject to business report must present their financial statements on a stand-alone basis or a consolidated basis, whichever is applicable. Auditor’s opinion must accompany financial statements submitted by the subject companies.

Disclosure Items in the Business Report

Information to be disclosed in the quarterly and semiannual business reports is similar to information available in the business report. Consolidated financial reporting is applicable to companies that have opted for financial reporting under IFRS. Information to be disclosed in the business report includes the following:

  • Company's business objectives;
  • Trademark;
  • Nature of business operations and activities (manufacturing, services, and financial services);
  • Compensation for company officers;
  • Status of board of directors, subsidiaries and affiliates, and other governance and organization matters;
  • Shareholder composition and other shareholder information;
  • Directors and Officers;
  • Transactions with related parties;
  • Financial statements and auditor's opinion;
  • Management discussion and analysis (MD&A); and
  • Other disclosures relevant to investor protection.

Material Disclosure

Companies that are subject to the quarterly, semiannual, and annual business reports must also comply with material disclosure that requires timely, up-to-date disclosure of any significant changes. Material disclosure must be filed within one day from the day of the occurrence. Activities, developments, and changes subject to material disclosure include the following:

  • Non-redemption of notes, suspension of banking accounts;
  • Partial or whole suspension of business operations;
  • Submission of application for court receivership or accelerated court receivership pursuant to the Debtor Rehabilitation and Bankruptcy Act;
  • Occurrence of a legally recognized cause for business dissolution;
  • Capital increase and reduction, decision by the board of directors on debt increase (contingent convertible bonds);
  • Initiation of a management procedure under Article 4(4) of the Corporate Restructuring Promotion Act or suspension of a joint management procedure under Article 12 of the same Act by a main creditor bank;
  • Filing of a securities class action;
  • Decision to list or delist from foreign stock exchanges, trading suspension;
  • Decision to issue convertible bonds, bonds with warrants and exchangeable bonds;
  • Occurrence of a trigger of contingent convertible bonds or occurrence of a trigger for redemption and reduced interest payment liability for contingent convertible bonds;
  • Resolution of the acquisition (completion of trust agreement) or disposition (termination of trust agreement) of treasury stocks;
  • Decision on merger, share exchange or transfer, division and split merger; (decision on major business activity or asset disposition or transfer); and
  • Exercising a putback option to give the beneficiary the right to execute a major asset disposition or transfer.;