General Holding Company Must Report Acquisition of CVC Shares Within 4 Months

Administrative Notice on the Amendment of the "Guidelines on Reporting the Establishment and Conversion of Holding Companies and the Status of Stock Ownership of Holding Companies"

[Sejong=Asia Economy Reporter Joo Sang-don] When acquiring shares of a corporate venture capital (CVC) under a general holding company, investment details must be reported within four months.

On the 27th, the Fair Trade Commission announced that it has prepared a revision of the "Guidelines on Reporting the Establishment/Conversion of Holding Companies and the Status of Share Ownership of Holding Companies, etc. (Notice)" containing this content, and will conduct an administrative notice for about 20 days until September 17.

This revision is being promoted to stipulate related application and reporting procedures and forms to implement the allowance of CVC ownership by general holding companies and the relaxation of establishment requirements for venture holding companies (total assets from 500 billion KRW to 30 billion KRW) following the full revision of the Fair Trade Act at the end of last year.

First, the revision of the notice stipulates the format of the share ownership report and the types of attached documents that must be submitted when a general holding company acquires and owns CVC shares.

A CVC, which is a subsidiary of a general holding company, must submit ▲investment details ▲investor details by investment association ▲sales details of stocks and bonds of CVC investment target companies ▲supporting documents related to investment and contribution within four months from the date the general holding company acquires CVC shares and the end of each fiscal year.

The procedures for prior application and internal transaction status reporting for the establishment and conversion of venture holding companies have also been specified. When a business operator applies for the establishment or conversion of a venture holding company, they must submit a balance sheet and a statement of share ownership that can prove total assets or the holding ratio of venture subsidiaries along with the application form. In addition, the internal transaction status report that venture holding companies must submit annually with their business report is to be prepared by classifying four types of transactions: funds and securities, assets, goods, and services.

A Fair Trade Commission official said, "This revision is expected to contribute to achieving the original purpose of revitalizing venture investment by allowing general holding companies to hold CVCs and easing regulations on venture holding companies, while efficiently monitoring and preventing side effects such as private interests of the controlling family." He added, "After fully collecting opinions from stakeholders during the administrative notice period, we plan to finalize and implement the revision through related procedures such as regulatory review."

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