Recent Development

The Capital Markets Board ("CMB") amended the Communiqué on Shares No. VII-128.1 and Communiqué on Disclosure of Material Events No. II-15.1. The amendments were published and entered into force on February 13, 2018.

What’s new?

Before the amendment to the Communiqué on Shares, in relation to public companies' capital increases, if the ratio of the total debts average from non-cash asset transfers to related parties to their total assets (excluding this debt) exceeded 20%, the excess was considered a material transaction. Also, the Communiqué on Shares required an information form about shareholders if the sale was for more than 10% of the total shares or 50% of the shares in actual circulation in the stock market by shareholders with management rights. The amendments abrogated both of these provisions.

According to the amendment to the Communiqué on Disclosures of Material Events, if a person's share in a public company reaches or falls below the ratios specified in the Communiqué (5%, 10%, 15%, 20%, 25%, 33%, 50%, 67% and 95%), such notification shall also be issued by the Central Registry Agency, along with the relevant shareholder.

Conclusion

The amendments aim to expand provisions protecting investors. Moreover, the amendments alleviate above mentioned obligations on the public companies and certain shareholders.