SK FIA Independence of Underwriters


On Jun. 3, SK FIA proposed revisions to securities underwriting rules.


  • SK FIA proposed revisions to the Regulations on securities underwriting, etc., to improve independence of underwriters and accountability for corporate due diligence.
  • Also to enhance the rationality of public offering price calculation and internal control.
  • Follows FSS May 2024 issued measures to improve IPO underwriting, see #211450.
  • Proposed Revisions
  • Make it mandatory to specify matters re payment of compensation for underwriters' undertakings, made up to the point of contract termination, in a contract.
  • Specify detailed items, methods, and compliance items for corporate due diligence.
  • Require underwriters' executive in charge of due diligence to check the due diligence plan and progress, review and approve a final report on the results of due diligence.
  • Require underwriters to establish and comply with internal standards for determining public offering price, undergo an internal approval process and retain relevant documents where they apply methods/procedures that differ from internal standards.
  • Specify items to be included in underwriters' internal control standards, such as matters to be confirmed before signing an underwriting contract, including fees.
  • Criteria for determining the level of internal review and deliberation according to an issuer's risk level; standards for reflecting demand forecast results to determine the public offering price; internal review procedure before submitting a securities report.
  • As well as record retention procedures for detailed performance of underwriters.
  • Consultation Period
  • Comments by Jun. 23, 2024, for planned effectiveness from Aug. 1, 2024.
  • Jun. 28, 2024 Revisions Finalized
  • On Jun. 28, 2024, SK FIA published revised regulations, effective from Aug. 1, 2024.

Regulators SK FIA
Entity Types B/D; Corp
Reference RF 11, 6/28/2024; CP 81, 6/3/2024; Reg 12/19/2023
Functions Actuarial and Valuation; Audit; Compliance; Financial; Legal; Market Conduct; Operations; Record Retention; Reporting; Risk; Treasury; Underwriting
Countries South Korea
Category
State
Products Equity; Issuance/IPO; Securities
Regions AP
Rule Type Final
Rule Date 6/3/2024
Effective Date 8/1/2024
Rule Id 214405
Linked to Rule :211450
Reg. Last Update 6/28/2024
Report Section International

Last substantive update on 07/03/2024