On May 27, SK FSC, SK FSS proposed revisions re convertible bonds.
SK FSC and SK FSS proposed revisions to the Regulations on issuance and disclosure of securities, to strengthen disclosure on convertible bonds (CBs) issuance, circulation.
Plus, to ensure that convertible prices of CBs are re-fixed at a reasonable price.
Follows Jan. 2024 SK FSC held meeting on improving market integrity, see #198742.
Proposed Revisions
Require companies to file material information disclosures when designating an entity for exercising call option/if the right to exercise it has been transferred to a third-party.
Require companies to file material information disclosures when acquiring CBs close to their maturity with details, such as reason for acquisition, plan for writing off/reselling.
Allow companies to re-fix convertible prices below 70% of the initial convertible price only through securing a special resolution at their general shareholders’ meeting.
Clarify that a downward adjustment of a convertible price following a capital increase or stock dividend will only be allowed above the value reflecting such event.
Make it clear that the reference date for calculating convertible prices of for privately offered CBs will be based on the date when payments are actually made.
Consultation Period
Comments to be submitted by Jun. 11, 2024 for planned effectiveness from Q3 2024.
May 28, 2024 Legislative Notice
On May 28, 2024, SK FSC issued a legislative notice on the proposed revisions.
In Oct. 2024, KRX proposed revisions re convertible bonds disclosure, see #230808.
Nov. 2024 Revisions Approved
On Nov. 13, 2024, SK FSC and SK FSS announced that revisions have been approved at SK FSC's 19th regular meeting, and will be implemented from Dec. 1, 2024.
Regulators
SK FSC; SK FSS
Entity Types
B/D; Corp
Reference
Dec, Mt, PR, 11/13/2024; CP, Nt 2024-171, 5/28/2024; CP, PR 1066, Trsl, 5/27/2024; Reg, Nt 2024-20, 4/30/2024
