Prohibition of Duplicate Subscription for IPOs from the 20th... Cabinet Meeting Decision Today

[Asia Economy Reporter Ji Yeon-jin] From the 20th of this month, duplicate subscription through multiple securities companies will no longer be allowed in public offering subscriptions.

The Financial Services Commission announced on the 15th at the Cabinet meeting that the amendment to the Enforcement Decree of the Capital Markets Act, which includes the prohibition of duplicate subscriptions for public offerings, has been approved.

The amendment requires the lead securities firms of public offerings to verify whether duplicate subscriptions have been made, and investors who have made duplicate subscriptions will not be allocated shares twice. Securities companies that fail to verify duplicate subscriptions or allocate shares multiple times will be considered engaging in unsound business practices. After verifying duplicate subscriptions, only the earliest received subscription will be allocated to the subscriber who made duplicate subscriptions.

The enforcement decree also includes the basis for securities finance companies and securities firms to collect and use personal information so that securities companies can verify duplicate subscriptions.

Additionally, the amendment stipulates that regarding the current obligation to allocate 20% of public offering shares to employee stock ownership associations, if the association expresses in writing a desire to receive less than 20%, the shortfall will be allocated to other investors.

Furthermore, the issuance limit for securities issued through cloud funding will be expanded from the current 1.5 billion KRW to 3 billion KRW.

Previously, whether crowdfunding intermediaries met the minimum capital requirements was assessed at the end of each fiscal year, but going forward, it will be assessed monthly, and the grace period for withdrawal will be shortened from one year to six months.

The Financial Services Commission stated that this amendment will take effect from the 30th of this month, and IPO-related matters such as restrictions on duplicate allocations in public offerings, which have a significant impact on the general public, will be applied as early as possible starting from securities registration statements submitted after the 20th of this month.

This content was produced with the assistance of AI translation services.