Minor Public Disclosure Errors Exempt from Fines if Corrected Within 10 Business Days

Amendment to the Enforcement Decree of the Fair Trade Act Passed at the Cabinet Meeting

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If a large corporation promptly rectifies a violation of disclosure obligations, the fine will be waived. Additionally, the status of executives of unlisted companies will be excluded from disclosure requirements.

The Fair Trade Commission announced on the 30th that the amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (Fair Trade Act), which includes these provisions, passed the Cabinet meeting. The amended enforcement decree establishes criteria for waiving fines when minor violations of disclosure obligations are promptly self-corrected.

Specifically, fines may be waived in cases where violations occur within 30 days from the date of designation or inclusion in a new corporate group and are self-corrected within 10 business days; violations due to minor negligence or errors are self-corrected within 10 business days; or in cases of natural disasters or force majeure where the possibility of misunderstanding the disclosed content is minimal.

The amended enforcement decree also deleted the items related to the status and changes of executives from the disclosure requirements for unlisted companies, following their removal from the Fair Trade Act, and accordingly removed these items from the enforcement decree and related subordinate regulations.

For disclosure items with a short deadline of within 10 days, the concept of business days was introduced to set the deadline, and the resolution period for large-scale internal transactions by the board of directors and the disclosure period for listed companies were changed from 1 day to 3 business days.

The amended enforcement decree of the Fair Trade Act, which passed the Cabinet meeting, is scheduled to be promulgated after the President’s approval and will take effect from the 7th of next month.

The Fair Trade Commission stated, "We have provided incentives for prompt voluntary correction of disclosure items that are minor in nature and unlikely to cause misunderstanding and have little impact on the market," and expressed expectations that "the market monitoring function of the disclosure system for large corporate groups will be further enhanced."

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