Unfaithful disclosure refers to not complied with the disclosure obligation specified in the FSCMA and the Stock Market's rule, including the violations such as reversal or alteration of disclosure already made.
Designation as unfaithful disclosure corporation is a self-regulatory measure imposed by the KRX for the purpose of ensuring faithful compliance with its disclosure regulation by the listed corporations, and it is separate from the measures taken against the false disclosure in accordance with the FSCMA or the violation of disclosure obligation specified by the FSC.
Criteria for designation as unfaithful disclosure corporation.
In designating as unfaithful disclosure corporation, the KRX-Stock Market gives an opportunity for the concerned listed corporation to present its case by sending a prior notice and ensures the fairness and reasonableness of such measure.
The KRX-Stock Market sends a prior notice to a listed corporation that falls under the criteria for designation as unfaithful disclosure corporation.
Of the corporations received a prior notice, any corporation, that has an objection to the designation as stated in the prior notice, must file a motion of objection to the KRX within 7 days of receiving the notice.
The KRX-Stock Market can take following measures against the unfaithful disclosure corprations.
The KRX-Stock Market organizes a training course for the disclosure officer and the staff member responsible for disclosure of the concerned corporation to prevent unfaithful disclosure in future.
For unfaithful disclosure corporations that accumulate 15 demerit points during the period under the designation as administrative issue or are designated as administrative issues, the KRX may request an improvement plan for the prevention of reoccurrences. The corporation concerned must then submit improvement plan within 10 days.
Corporations are designated as administrative issue if the demerit points accumulated reach 15 or more during the past year reckoned from the date the corporation receives demerit points due to circumstances such as designations as unfaithful disclosures.
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