Korea Exchange Issues 'Investment Caution Notice' for Fiscal Year-End

Investment Caution Regarding Unfair Trade Practices of Hangee Companies

The Korea Exchange Market Surveillance Committee announced on the 11th that it will activate an 'Investment Caution Notice' as the deadline for submitting audit reports for December fiscal year-end corporations in the 2023 business year approaches.

Korea Exchange, Yeouido, Seoul. Photo by Jinhyung Kang aymsdream@

According to the Exchange, some at-risk companies during the fiscal year-end period have cases where insiders, such as major shareholders, dispose of their shares in advance before disclosing undisclosed material information to avoid losses. Additionally, there have been cases of disposing of held shares using false or delayed disclosures.

Furthermore, the Exchange presented the main characteristics of at-risk companies vulnerable to unfair trading related to fiscal year-end as ▲ sudden changes in stock price and trading volume ▲ large-scale fundraising ▲ dissemination of favorable information ▲ and other reasons such as delayed submission of audit reports followed by causes for delisting.

A Market Surveillance Committee official from the Exchange stated, “We plan to closely monitor whether unfair trading occurs when the stock price and trading volume of at-risk companies change sharply without any special reason,” adding, “If we detect market order disruption suspicions such as theme stock formation or the spread of false or exaggerated rumors online, we will respond promptly to minimize investor damage.”

He continued, "We ask investors to refrain from follow-up trading by referring to the characteristics of at-risk companies related to fiscal year-end and major types of unfair trading," and added, "We urge investors to carefully verify accurate information about listed companies before investing."