Regulatory Alerts2026-07-06 | 87263Added · Updated
FSC and KRX Propose Rules Prohibiting Split Listing and Granting Exemptions
The Financial Services Commission and the Korea Exchange propose rules prohibiting split listings that fail to protect parent company shareholders, applying to subsidiaries with vertical ownership of at least 20 percent or more than 50 percent in second-tier entities. Parent company boards must execute five specific fiduciary duties, including impact assessments, shareholder protection mechanisms, and independent committee screenings, before KRX conducts final review. Exemptions are strictly limited to subsidiaries demonstrating operational independence, with shareholder consent required for split-offs and generally recommended, subject to a 3 percent voting cap. Listings of subsidiaries with sales, profits, and assets under 10 percent of the parent may proceed if the board faithfully implements the five duties.