Selling Stock Options Received from Overseas Headquarters Becomes Easier

Amendment to the Enforcement Decree of the Capital Markets Act Passed at the Cabinet Meeting

Financial Services Commission. Photo by Dongju Yoon doso7@

The procedure for selling overseas stocks received as performance rewards by employees of foreign companies will become easier. Additionally, the barriers to trading foreign exchange derivatives by foreign financial institutions (RFIs) will be lowered.

According to financial authorities on the 27th, the amendment to the "Enforcement Decree of the Capital Markets and Financial Investment Services Act," aimed at improving the system related to overseas listed securities trading and follow-up measures for the foreign exchange market structure improvement plan, was approved at the Cabinet meeting on the same day.

Until now, overseas listed foreign currency securities and foreign currency derivatives could only be traded through domestic securities firms. Overseas listed securities deposited with foreign securities firms had to be transferred to domestic securities firms before they could be sold.

However, there have been concerns that transferring to domestic securities firms is sometimes impossible or the transfer process is inconvenient. Therefore, the financial authorities have decided to allow exceptions for certain sales transactions.

An example of overseas listed securities not acquired through domestic securities firms is when employees of foreign companies in Korea receive shares of the foreign headquarters as performance rewards. Going forward, in cases where overseas listed securities are inherited or gifted from non-residents in Korea and foreign exchange transaction reporting is exempted, these securities can be sold directly through foreign securities firms without the need to transfer to domestic securities firms.

However, except for these exceptional transactions, overseas listed securities or overseas derivatives transactions must still be conducted through domestic securities firms as before.

Furthermore, foreign financial institutions registered to conduct foreign exchange operations under the Foreign Exchange Transactions Act will be explicitly excluded from the requirement to obtain a derivatives investment trading business license under the Capital Markets Act when trading foreign exchange derivatives through foreign exchange brokerage firms.

The amendment to the Enforcement Decree of the Capital Markets Act approved at the Cabinet meeting is scheduled to be promulgated in early next month and will take effect immediately upon promulgation.

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