S.K.’s stock market index to release English disclosures this coming year

The mandatory English disclosures of significant information will be enforced for KOSPI-listed firms in two stages.

Beginning 1 January 2024,  KOSPI-listed corporations will initiate English disclosures on significant information within three working days after filing disclosures in Korean with the KRX, declared South Korea’s Financial Services Commission (FSC).

This marks the initial stage of the compulsory English disclosure obligation incorporated as part of the all-encompassing measures to enhance foreign investors' entry to Korean capital markets, unveiled in January of this year.

According to this arrangement, the mandatory English disclosures on significant information will be enforced for KOSPI-listed firms in two stages (initial phase spanning from 2024 to 2025 and a subsequent phase anticipated after 2026), commencing with large listed enterprises. Various initiatives to encourage an extension of English disclosures will also be introduced.

Starting from 2024, KOSPI-listed companies with assets valued at KRW10t or more must present English disclosures on (a) matters related to closing financial statements, (b) matters concerning crucial decision-making, and (c) matters related to trading suspension within three days of filing regulatory disclosures in Korean.

Meanwhile, authorities intend to sustain diverse support measures to facilitate businesses in adjusting more effortlessly to the obligatory English disclosure criterion. Noteworthy benefits, such as exemption from listing fees, will be conferred upon entities recognized for exceptional English disclosures. 

Furthermore, the availability of translation services from professional translation providers will be broadened, and training courses on English disclosures will be intensified. 

Additionally, improvements to English disclosure platforms (KRX's KIND English website and FSS's DART English website) will be pursued, encompassing an expansion of automated machine translation services, introduction of English search functionality for Korean statutory disclosures, and refinement of translation quality using AI-based machine translation.

The process of revising pertinent regulations for enforcing the compulsory English disclosure stipulation was finalized in March this year. Both the KRX and affiliated organizations have disseminated information and conducted training sessions, concurrently upgrading their English disclosure platforms.

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To ease the transition for listed companies and enhance their capabilities, the KRX has widened the provision of translation services by professional providers and conducted training sessions in collaboration with the Korea Listed Companies Association. 

As of 1 January 2024, when companies submit disclosures in Korean, the upgraded KRX system will automatically indicate whether English disclosures are required.

Moreover, the KRX will introduce an AI-based machine translation service on its KIND electronic disclosure system from 18 December, developed in partnership with NAVER Cloud Corp.'s Papago translation service. 

This service, resulting from an MOU signed in October, aims to enhance the translation quality of disclosures. The AI-based machine translation service will aid listed companies in translating disclosure information more effectively, facilitating easier access for foreign investors to English information.

Simultaneously, the FSS has incorporated the feature of automatic notification to listed companies regarding their English disclosure obligation when submitting statutory disclosures on its DART website. 

Plans also include upgrading the DART English website to provide automatic translation of the table of contents and statutory disclosures' format from Korean to English, along with establishing an English version of the Open DART platform for accessing key disclosure information for analysis by visitors.

The authorities are committed to offering diverse support programs, ensuring a smooth implementation of the mandatory English disclosure rule. 

With the initial phase set to commence in January 2024, the FSC anticipates improved accessibility for foreign investors to corporate information, contributing to the enhanced competitiveness of Korea's capital markets.