Recent Intensification of Investor Protection in the Korean Securities Market: The Mandatory and Fair Disclosure Systems

This Article analyzes the Korean fair disclosure system and the Korean mandatory disclosure system under the Korean Securities and Exchange Act ( KSEA ). After the turbulence in the financial markets resulting from the economic crises of late 1997, the South Korean government realized that the Korean economy had failed to keep pace with the world economy. The Korean economy underwent many changes after being offered financial relief from the International Monetary Fund. As part of these changes, the government adopted a series of structural reform measures to improve the standard of corporate governance and enhance corporate management. The KSEA now provides a vehicle for balancing information within the securities market, as does the Fair Disclosure Standard ( FIDS ), adopted in November 2002. The system, while an improvement, is not perfect. This Article compares Korean and U.S. fair disclosure and mandatory disclosure systems and addresses problems in the former. It also makes suggestions for improving Korean fair disclosure and mandatory disclosure regulations and securities practices