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Obligation of English disclosures to extend to broader scope in 2026
By Anna J. Park
Next year, companies listed on the country's main benchmark KOSPI market will be required to publish disclosures in English within three days after the same disclosure information is submitted in Korean to the Korea Exchange (KRX), the bourse market operator.
This is according to the revision of the KRX's disclosure regulations completed at the end of March. The Financial Services Commission (FSC) and the KRX have been working together since January to revise the disclosure regulation in order to broaden the local capital market's accessibility to foreign investors.
According to the timeline set by the top financial regulator, the obligation of publishing company disclosures in English will be imposed on large-cap KOSPI-listed companies starting next year. Companies listed on the KOSPI market that hold over 10 trillion won ($7.68 billion) worth of assets will be required to publish disclosures in English on settlements of accounting or major corporate decisions that could affect stock markets, within three days of submitting the disclosures in Korean to the KRX.
For companies with assets standing between 2 million won and 10 trillion won, the obligation will be imposed if foreign investors hold more than a 30 percent stake in the firm. As of the end of 2021, 13 percent of all KOSPI-listed firms meet the standards, and they will face the obligation next year.
"Despite that foreign investors hold 30.8 percent of the entire Korean stock market cap, as of the end of 2022, the Korean stock markets have been criticized for not providing enough information in English," the FSC said. "The gradual requirement of publishing corporate disclosures in English is expected to improve foreign investors' access to corporate information, stoking the Korean capital market's global competitiveness."
The aggregate number of disclosures published in English by KOSPI-listed companies last year stood at 2,453, which is only about 13.8 percent of the disclosures published in Korean. While it showed a year-on-year improvement, considering the percentage was 9.2 percent in 2021, global investors view that the Korean bourse markets have limited accessibility due to lack of disclosure information available in English.
The obligation to publish disclosures in English will then be extended to listed companies with over 2 trillion won worth of assets in 2026, covering around 30 percent of all KOSPI-listed firms.
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