• Consultation on plan to amend large shareholding reporting rules (so called 5% rule).

Substantial Shareholding Reports

• Under the 5% rule, a person who holds 5% or more of the equity securities of a listed company or who thereafter changes its holdings by 1% or more in the company must file a report with the FSC and the KRX within five days from the date of such changes.
• Institutional investor whose shareholding purpose is not intended to exercise influence over company’s management has an extended deadline, and can submit simple report.
• Increasingly difficult to draw a clear line between institutional investor activities with purpose of exercising influence over the management and those without such purpose.
• Changes clarify scope of shareholder activities to exercise influence over management and apply differential reporting requirements according to the shareholding purpose.

Effectiveness

• Comment to 16 October 2019, revised 5% rule expected to take effect in first half 2020.