'Venture Investment Act Amendment' Enhancing Transparency of Startup Planner Information to be Promulgated on the 3rd

Key Provisions of the Venture Investment Act Amendment.

[Asia Economy Reporter Choi Donghyun] The Ministry of SMEs and Startups announced on the 2nd that the amendment to the "Venture Investment Promotion Act," which strengthens the disclosure obligations of startup planners (accelerators), is scheduled to be promulgated on the 3rd.

The amendment to the Venture Investment Act was originally proposed by Hong Jeongmin, a member of the Democratic Party of Korea, on February 15, 2021. It was approved at the National Assembly plenary session on the 8th of last month and sent to the government on the 23rd of the same month.

Through this amendment, disclosure items that had been delegated to the Minister of SMEs and Startups' notification (Regulations on Registration and Management of Startup Planners), such as the average investment amount in early-stage startups and the status of professional incubation, have been elevated to statutory provisions.

Going forward, it is expected to help reduce some information asymmetry between startups and startup planners, assisting startups seeking professional incubation and investment attraction in selecting excellent startup planners.

The amended Venture Investment Act will take effect on April 3, three months after the promulgation date, according to the supplementary provisions. Before the law takes effect, the Ministry of SMEs and Startups plans to revise subordinate statutes by gathering opinions from the industry and experts.

Minister Lee Young of the Ministry of SMEs and Startups emphasized, "This legal amendment indicates that information of key market participants must be transparently circulated for the sound development of the domestic venture investment market," adding, "However, such information disclosure should be conducted within the scope that does not infringe on the management and business secrets of the parties to the investment contract." He further stated, "While considering the purpose of the National Assembly's amendment of the Venture Investment Act, we will carefully deliberate to ensure that the strengthened disclosure obligations do not act as excessive regulations and prepare subordinate statutes accordingly."

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