"Capital Market Unfair Trading Report Reward, Maximum Limit 3 Billion Won"

Amendment to the Enforcement Decree of the Capital Markets Act Passed at the Cabinet Meeting

The maximum reward paid to whistleblowers reporting unfair trading in the capital market will increase from 2 billion KRW to 3 billion KRW. The entity responsible for paying the rewards will also change from the Financial Supervisory Service to the Financial Services Commission.

On the 30th, the Financial Services Commission and the Financial Supervisory Service announced that the amendment to the "Enforcement Decree of the Capital Market and Financial Investment Business Act" containing these details was passed at the Cabinet meeting.

Prior to this, the "Regulations on the Return of Short-term Trading Gains and Investigation and Reporting of Unfair Trading" and the "Capital Market Investigation Work Regulations," which were preliminarily announced for amendment in December last year, were also approved at the regular meeting of the Financial Services Commission on the 18th.

In addition to raising the maximum reward limit from 2 billion KRW to 3 billion KRW, the amendment to the enforcement decree and regulations also includes raising the base amount used for calculating the reward. Furthermore, if the investigation of the reported case finds that the suspect has obtained unjust gains, the scale of 'unjust gains' will be newly reflected in the reward calculation criteria so that higher rewards can be paid according to the amount of criminal proceeds.

The financial authorities expect that through this improvement in the calculation criteria, the amount of rewards paid to whistleblowers will increase by about 1.8 times compared to before. It is anticipated that the average amount paid for 10 cases over the past five years will increase from 28.26 million KRW to 53.18 million KRW.

The Financial Services Commission has also introduced an anonymous reporting system. Previously, whistleblowers had to disclose their personal information to report unfair trading, which was understood to cause hesitation due to the burden of reporting. However, to receive a reward after anonymous reporting, the whistleblower must submit evidence proving their identity and that they are the reporter within one year from the date of the report.

The amendment to the Capital Market Act enforcement decree and the changes to the work regulations are scheduled to be implemented simultaneously on the 6th of next month (tentative), when the amended enforcement decree is promulgated.