The Financial Services Commission said on the 20th that when it exceptionally allows a duplicate listing after a split, the so-called "split listing," it will decide how much of the public offering shares to allocate to ordinary shareholders of the parent company "by comprehensively considering the protection of ordinary shareholders of the parent company and the impact on the initial public offering (IPO) market in the course of future National Assembly discussions."
The Financial Services Commission (FSC) said the same day that "the currently discussed amendment to the Financial Investment Services and Capital Markets Act is a bill introduced before the announcement of the plan to ban duplicate listings in principle, and when duplicate listings are in principle banned and exceptions are allowed, prioritizing the allocation of new shares to the parent company's shareholders will serve as a mechanism to more robustly protect ordinary shareholders," and stated accordingly.
The ruling party is discussing an amendment to the Financial Investment Services and Capital Markets Act that would require allocating 25% of new shares, or as much as more than 70%, to the parent company's shareholders in the case of a split listing.
However, the Financial Services Commission (FSC) sees a possibility of side effects, such as contraction of the IPO market, if the priority allocation ratio of new shares is excessively high. If split listings are exceptionally allowed, differing views between the ruling party and the financial authorities over the ratio of new shares to be preferentially allocated to the parent company's shareholders are likely to lead to intense debate ahead.
The Financial Services Commission (FSC) also outlined its position on the mandatory tender offer system. The mandatory tender offer system provides an opportunity for minority shareholders to share in the control premium during changes in a corporation's control, and the volume required for a mandatory tender offer is the key issue.
While saying that the specific level of regulation has not been finalized, the Financial Services Commission (FSC) explained that "the government's position is to delegate the mandatory tender offer volume to a presidential decree to flexibly respond to market demand, such as revitalizing mergers and acquisitions (M&A), while intending to stipulate the minimum threshold that can be set by presidential decree as 50% plus one share or more."
The ruling party has introduced a bill requiring the purchase of the entire remaining equity (100%) when acquiring 25% or more of the equity.