Proposed Bill: Partial Amendment to the Commercial Act

Proposed by Rep. Lee Jung-mun (Democratic Party of Korea)

● To better protect the interests of general shareholders, this amendment broadens the scope of directors' duty of loyalty to include both the company and its shareholders. Additionally, it mandates that large publicly listed companies adopt cumulative voting for the election of directors and introduce electronic shareholder meetings to improve transparency and fairness in corporate governance and decision-making.

Proposed Bill: Partial Amendment to the Act on Promotion of Information and Communications Network Utilization and Information Protection

Proposed by Rep. Kim Jang-kyom (People Power Party of Korea)

● To prevent foreign information and communication service providers from avoiding legal responsibilities and to better protect domestic users, this amendment clarifies the criteria requiring foreign businesses to appoint a domestic agent. It also strengthens penalties for non-compliance with applicable laws.

Pending Bill: Partial Amendment to the Depositor Protection Act

Proposed by Rep. Eom Tae-young (People Power Party)

● To enhance depositor protection, this amendment proposes increasing the maximum insurance coverage for deposits from 50 million won to 100 million won ($35,000 to $70,000). It also mandates a review and update of the maximum coverage limit for each financial sector every five years.

Promulgated Bill: Enforcement Decree of the Financial Investment Services and Capital Markets Act

Competent Authority: Financial Services Commission

● To enhance corporate autonomy and transparency in merger valuations, this bill excludes mergers involving non-affiliated companies from the mandatory calculation formula for merger prices, replacing it with a requirement for external evaluations to ensure fairness. For mergers between affiliated companies, the bill requires that external evaluation institutions be selected with the approval of the audit committee to strengthen oversight and protect minority shareholders.

Additionally, external evaluation institutions must adhere to newly established quality management standards when conducting merger evaluations, and inspection results must be disclosed. Institutions involved in the merger price determination process are prohibited from being selected as external evaluators for the same transaction.

Administrative Announcement: Partial Amendment to the Enforcement Decree of the Financial Investment Services and Capital Markets Act

Competent Authority: Financial Services Commission

● This amendment requires institutional investors to establish internal control guidelines and implement an electronic monitoring system to prevent naked short selling. It also sets the base amount of administrative fines for violations at 100 million won.

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The Korea Herald republishes a weekly legislative report by local law firm DR & AJU LLC to provide the latest information on bills approved, proposed, pending and set to be promulgated. -- Ed.

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For queries about the bills, contact cr@draju.com