Investors in Korean companies could face a tighter timetable when complying with the regulatory requirement to report shareholdings of above 10 per cent in Korean companies.
A draft set of reforms published on Boxing Day by the Financial Supervisory Service (FSS) includes a proposed revision of the 10 per cent reporting rule to make investors file details within five calendar days of the acquisition, as opposed to the ten days currently in force.
The draft reforms also propose a loosening of the short selling requirements. At present, all investors are required by the regulators to pay a 100 per cent “Entrustment Guarantee Deposit” on the purchase and sale of stocks in violation of the short selling regulations, irrespective of whether the transaction was intentional or not. FSS is proposing that inadvertent transactions be excluded from this stipulation.
For after-hours basket trading in Korea Stock Exchange-listed stocks, FSS proposes that orders be executed within 7 per cent (rather than 5 per cent) of the closing price (within the range of the day’s highest and lowest prices).
FSS is also proposing to allow firms trading futures and options on KOFEX to pay margin in US dollars as well as Korean Won.