Korea Exchange (KRX) said on the 15th it will scrap the "abbreviated disclosure" it temporarily allowed this year for high-dividend corporations starting next year. In addition, in the second half of this year, it plans to separately select and publish corporations with a low price-to-book ratio (PBR).
Earlier, the exchange temporarily allowed abbreviated disclosures after the enforcement decree of the Act on Restriction on Special Cases Concerning Taxation was revised at the end of February this year, to reduce the burden on listed companies that lacked the capacity to prepare disclosures of plans to enhance corporate value.
However, starting next year, all high-dividend corporations must submit a complete disclosure that fills out every element of the corporate value enhancement plan, including a status diagnosis, goal setting, execution plan, implementation evaluation, and investor communication.
Also in the second half, it plans to select and publish "low PBR" corporations. Targets include corporations whose PBR ranks in the bottom 20% within the same industry for two consecutive half-years. However, the exchange decided to exempt publication for a certain period if a listed company selected as a low PBR corporation submits a disclosure of its corporate value enhancement plan. The aim is to induce corporations to make proactive value-up efforts.
An exchange official said, "We will secure the effectiveness of PBR improvement by exempting publication only when specific improvement plans, such as PBR status diagnosis, goal setting, and execution plans, are included."
The exchange plans to provide ongoing support so that listed companies can submit thorough and substantive disclosures of corporate value enhancement plans.