The passage of the 3rd Commercial Law Amendment in South Korea is anticipated to significantly impact domestic companies and the capital market by mandating the cancellation of treasury shares to enhance shareholder value.
On the 25th, the 3rd Commercial Law Amendment was passed in the Korean National Assembly under the leadership of the Democratic Party, marking a significant change for domestic companies and the capital market. The KOSPI has shown expectations of this law's passage, continuously achieving record highs, with it surpassing the 6000 mark. The mandatory cancellation of treasury shares is expected to increase the value of shares held by ordinary shareholders, as well as improve earnings per share and dividends. The core of the amendment requires companies to cancel the treasury shares they acquire in the future within one year, while allowing existing shares owned prior to the law's enactment to be canceled within 18 months, with some exceptions allowed for employee compensation and other operational purposes.
