The Financial Supervisory Commission of Korea (FSC) has approved amendments to listing and disclosure rules to ease listing regulations for non-domestic companies (that is, companies incorporated or organized in jurisdictions other than Korea).
First, whereas in the past non-domestic companies were only eligible for secondary listing, the approved amendments allow non-domestic companies not listed in an overseas stock exchange to apply for primary listing on the Korea Exchange (KRX).
Second, the approved amendments allow non-domestic companies to prepare financial statements based on Korean Gaap, US Gaap or International Accounting Standards; provided that at any time after a non-domestic company becomes listed on the KRX, it is restricted from arbitrarily changing the then employed accounting standards.
Third, non-domestic companies are subject to the same ongoing disclosure requirements as domestic companies (that is, companies incorporated in Korea) and are required to file disclosures in the Korean language. For example, full-length periodic disclosures must be filed in the jurisdiction of a company's incorporation (or organization), but a non-domestic company may satisfy the Korean disclosure requirements by submitting the same report together with a summary of that report in Korean.
The approved amendments also exempt non-domestic companies listed on the KRX from full compliance with the fair disclosure rules barring selective disclosure of information. The FSC anticipates that this change will decrease the level of unnecessary compliance burden for non-domestic companies.
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