As the Lee Jae-myung administration signaled a tough stance on unfair transactions and false disclosures, amendments were made to a strengthened Capital Markets Act and the Capital Market Investigation Rules. Legal grounds have been established for the "Action plan to eradicate unfair transactions in the capital market" released on Jul. in 2025.
The Financial Services Commission (FSC) said on the 22nd that the enforcement decree of the Capital Markets Act and the Capital Market Investigation Rules were approved at the Cabinet meeting and the Financial Services Commission, respectively.
The Capital Markets Act laid the groundwork to shift the Korea Exchange (KRX)'s market surveillance system from an "account-based" approach to a "person-based" approach. Until now, the Korea Exchange (KRX) has conducted market surveillance centered on accounts without using personal information. However, account-based surveillance lacked information about account holders, led to an excessive number of surveillance targets, and made it difficult to determine whether entities were linked to the same person.
With the shift to a person-based market surveillance system, the Korea Exchange (KRX) will be able to use some personal information. Accordingly, the number of surveillance and analysis targets is expected to decrease by about 39%. Detecting and cracking down on illegal acts such as collusive trading and wash trades is also expected to become easier.
The Capital Market Investigation Rules strengthen the criteria for imposing penalty surcharges for unfair transactions and disclosure violations, and establish grounds for aggravated sanctions on unfair transaction suspicions involving officers and employees of financial firms.
The basic penalty surcharge for unfair transactions could previously be imposed from 0.5 times up to a maximum of 2 times the unjust gains, and for market-disruptive conduct from 0.5 times to 1.5 times, but the minimum threshold has been raised to at least 1 time. For disclosure violations, the penalty surcharge could previously be imposed from 0.2 times to 1 time of the statutory maximum, but the minimum threshold was doubled to 0.4 times.
In addition, new provisions were added for aggravated punishment of acts in which financial firms use nonpublic information obtained in the course of duty and for false disclosures by listed corporations.
The Financial Services Commission (FSC) said, "Through the amendments to the enforcement decree of the Capital Markets Act and the Capital Market Investigation Rules, we can swiftly detect unusual transactions and unfair transactions and impose strict measures against unfair transactions and false disclosures through stronger sanctions," adding, "It is expected to contribute to establishing a fair market order and protecting investors."