Definition
  • Under the fair disclosure system, listed corporations that wish to provide designated people such as institutional investors with important information not yet disclosed through the stock market must first disclose it so that all market participants receive the same information.
  • Fair disclosure is in charge of preventing unfair trading, supplementation of the timely disclosure system, formation of a stock market environment that induces rational business analysis, etc.
Requisites for the Occurrence of Fair Disclosure Duties
  • What: Information Applicable for Fair Disclosure
    Forecasts for business results such as sales or future/management plans, etc. and information regarding provisional business results and key management matters, etc.
  • Who: Providers of Fair Disclosure Information
    High-ranking persons with access to fair disclosure target information and employees, etc. who have access to the same information due to their work responsibilities.
  • To: Target Recipients of Fair Disclosure Information
    Those engaged in securities businesses both in Korea and abroad and those who have easier access to fair disclosure target information relative to others.
  • How: When Offered Selectively
Disclosure deadline
It should be reported to KRX before making such information available. However, in case where fair disclosure information has been made available due to an accident or minor error, such fact must be reported on the day such accident or error occurred. In case of substantiating that such release came about without knowledge, it may be reported by an executive in charge on the day such fact was discovered.
Measures taken against violation of the fair disclosure regulation
Any listed corporation violating the fair disclosure obligation is subject to the same measures that are taken against the violators of timely disclosure obligation, e.g., designation as unfaithful disclosure corporation, trading suspension, publication of the fact about the designation, compulsory training program, and investigation into trading practices. In case of withdrawing the stocks from the market (e.g., designation as administrative stock and delisting) due to the violation of fair disclosure regulation, the frequency of violation taken into the decision-making is reduced by 1/2, i.e., only 1/2 of the incidences are counted.
Application of the safe harbor clause to the case of disclosures of forecasted information
By applying the exemption clause, when a listed corporation cancels, denies or revises the forecasted information already disclosed in accordance with the methods specified in the FSCMA, such corporation is not designated as unfaithful disclosure corporation. The Rationale for application of the safe harbor clause is to make wider the range of information available to the investors by actively encouraging the listed corporations to make public the important business forecasts.