The Financial Services Commission, the Financial Supervisory Service, and the Korea Exchange have been working to make improvements to corporate disclosure rules since there have been growing demands from both domestic and overseas investors in seeking information about listed companies. However, it has been suggested that further improvements are needed in order to make capital markets more accessible for global investors and to enhance information provision to make it easier for shareholders to better exercise their rights.
In this regard, the FSC, FSS, and KRX have prepared the following measures to strengthen rules on English disclosures and the disclosure of information on annual general meeting of shareholders (AGMs) to help enhance market accessibility and improve shareholder rights.
Key Measures
Expanding Application of English Disclosure to Boost Market Accessibility
a) Mandatory English disclosure: Entering phase II and preparing for phase III
Currently, large KOSPI-listed companies with assets worth KRW10 trillion or more (111 companies as of end-2024) are submitting disclosures in English on material information (26 key items), such as information pertaining to corporate governance structure or reorganization, settlement of accounts, and securities issuance, within three business days of filing their original disclosures in Korean with the KRX (effective from January 2024).
Starting from May 1, 2026, the mandatory English disclosure requirement will enter into a second phase. The scope of KOSPI-listed companies subject to the mandatory English disclosure requirement will be expanded to those with assets worth KRW2 trillion or more (265 companies as of end-2024). The disclosure items subject to the mandatory English disclosure will also be expanded to all disclosure items required by KRX rules, including material information in its entirety (55 items), fair disclosure, and inquired disclosure. The time required for companies to submit English disclosures after filing their original Korean disclosures will also be reduced. Large KOSPI-listed companies with assets worth KRW10 trillion or more will need to submit English disclosures on the same day of filing their Korean disclosures with the KRX in principle. Other KOSPI-listed companies with assets worth KRW2 trillion or more will need to submit English disclosures within three business days from filing their original Korean disclosures with the KRX.
The mandatory English disclosure requirement is expected to enter into the third and final phase in 2028, under which all KOSPI-listed companies will become subject to the mandatory English disclosure requirement. Meanwhile, the FSC will consider expanding the scope of disclosure items subject to the English disclosure to regulatory disclosure items mandated by law after examining pertinent situations in other non-English-speaking countries and potential effects on companies. The FSC will also consider introducing the mandatory English disclosure requirement to large KOSDAQ-listed companies (e.g. with assets worth KRW2 trillion or more).
b) Boosting support for English translation and usability of English disclosure
There will be enhanced support for translation to help reduce the burden placed on companies, while boosting the accuracy and speed of English disclosures. The KRX translation assistance service currently in operation will expand its operational capacity to reduce the time it takes for service completion, and the eligibility to apply for this service will be expanded in principle to all KOSPI-listed companies subject to the mandatory English disclosure requirement. In addition, the KRX plans to compile and disseminate an AI-developed glossary on English disclosure and provide relevant training and information sessions in the future.
To help make English disclosures more widely used by global investors, there will be consistent efforts to make sure a seamless operation of English disclosure platforms. The FSS will seek to complete the development of English disclosure platform DART by the end of this year to make sure its service stability. There will be continuous efforts to broaden the applicability of XBRL (eXtensible Business Reporting Language) in terms of both the applicable industry type (from mostly non-finance industry currently to both finance and non-finance industries) and the applicable information type (from mostly the body of financial statements currently to both the body of financial statements and annotation details) to help enhance global investors’ access to finance-related information.
Enhancing Disclosure on AGM and Executive Compensation
a) Improving disclosure on AGM voting results
Currently, companies disclose information regarding the result of AGM but only the information about whether an agenda has been approved or not. In this regard, information about voting results (% of votes in assent) is not being disclosed. This has been divergent from the commonly observed corporate disclosure practices in major overseas countries, such as the U.S., Japan, and the U.K. where companies are required to disclose voting results (% of votes in assent). Thus, there have been demands from investors to improve upon this issue.
As such, to help make AGMs more transparent and enhance regulatory consistency with global standards, starting with AGMs held in March 2026, companies will be required to disclose voting results (% of votes in assent) by agenda item. Through KRX disclosure (ad hoc disclosure), companies will need to disclose voting results (% of votes in assent, dissent, and abstention) by agenda item on the day of holding AGMs, and also disclose the voting results (% of votes in assent, dissent, and abstention + total shares in assent, dissent, and abstention) through periodic disclosure of business report.
b) Encouraging companies to spread out AGM holding schedules
Although there have been continuous efforts (e.g. revising the model articles of incorporation for listed companies) for encouraging companies to spread out their AGM holding schedules, about 90 percent of listed companies still hold their AGMs in late March. This creates the problem of heavy concentration of AGM schedules and of shareholders not being able to participate and exercise their rights effectively, leading to conditions of having AGMs only in a perfunctory manner. Thus, it is necessary to continue to encourage companies to spread out their AGM holding schedules potentially to April.
In this regard, there will be stronger incentives provided to the companies that make changes to the rules regarding the record date under their articles of incorporation to move their AGM holding schedule to April. When making a selection of companies for outstanding disclosure practices, the KRX will grant extra points to these companies. Similarly, these companies will be granted with a reduction of demerit when identified with unfaithful disclosure practices. In addition, a revised guideline will be provided for corporate governance structure report (on a “comply or explain” basis) requiring companies to write down and disclose whether they have made changes to the rules regarding the record date in their articles of incorporation in accordance with the model articles of incorporation for listed companies and any other effort they made for helping to spread out AGM holding schedules.
c) Improving disclosure on executive compensation
Currently, the disclosure of information regarding the details of how executive compensations are being calculated has remained insufficient, and there has been lack of information demonstrating a relationship between business performance and executive compensation. Compared to major overseas countries, such as the U.S. where the correlation between executive compensation and financial performance (total shareholder return) is disclosed in detail with time series analysis and peer group comparisons, it has been pointed out that the disclosure of executive compensation in Korea has been lacking in concreteness.
Moreover, stock-based compensations in the form of restricted stocks are being disclosed separately from executive compensations, and the unfulfilled portion of stock-based compensations is being recorded only in terms of the quantity but not in cash value, which makes it difficult for shareholders to accurately understand the actual size of executive compensations. In addition, stock-based compensations other than stock options are not being disclosed even on the top five earning executive/employee compensation form.
In this regard, to help make it easier for shareholders to clearly understand the relationship between business performance and executive compensations, companies will be required to write side-by-side on the total executive and top five executive/employee compensation form their total shareholder return (TSR) and operating profit for the most recent three years. On each specific compensation category (salary, bonus, stock option, stock-based compensation other than stock option, requirement income, etc.), companies will also need to disclose detailed information providing justification their compensation decisions.
To help make it easier for shareholders to clearly understand the actual size of executive compensations including stock-based compensations, companies will be required to disclose every type of stock-based compensation on the total executive and top five executive/employee compensation form and write side-by-side the cash value of unfulfilled stock-based compensations. Stock-based compensations other than stock options will also need to be disclosed in detail for each executive as in the case with the granting of stock options.
Further Plan
The FSC will update relevant regulations on the issuance of securities and disclosure to provide clear and detailed rules on the updated disclosure requirement (regarding AGM results, executive compensation, and stock-based compensation). The proposed rules change will enter into a comment period from November 17 to December 8 and take effect in the first half of 2026 after going through a successive regulatory review and approval process. At the same time, relevant rule changes will also be made to KRX’s KOSPI market disclosure regulations to prepare for the second phase implementation of the mandatory English disclosure requirement.
Through an expansion in English disclosures and relevant support made available for companies, the FSC expects that global investors will be able to experience enhanced accessibility to Korean capital markets. Moreover, the improved disclosure rules on AGM and executive compensation will help to strengthen the provision of information enabling shareholders to more actively exercise their rights, while ensuring more responsibility from corporate executives. The upgraded disclosure rules will also help to boost regulatory consistency with global standards. The FSC, FSS, and KRX will continue to closely monitor corporate disclosure practices to seek issues and areas where further improvements are needed.
* Please refer to the attached PDF for details.