Bill Subcommittee of the National Assembly's Political Affairs Committee
The amendment to the Capital Markets Act aimed at protecting minority shareholders failed to pass on the 20th. While the ruling and opposition parties' positions on the key contentious bill, the Capital Markets Act, remained far apart, the amendment to the Korea Development Bank Act, which was submitted together, was not even reviewed. However, bills establishing the operational basis for the country's first Alternative Trading System (ATS), set to launch in March, were passed.
The National Assembly's Political Affairs Committee held the first subcommittee meeting on bill review that day to discuss the Capital Markets Act amendment and others. Amid concerns that the piled-up financial legislative agenda might drift due to the impeachment political situation, the bill subcommittee meeting started at 10 a.m. and continued past 5 p.m.
However, even at this meeting, the ruling and opposition parties failed to narrow their differences over the Capital Markets Act amendment. Both sides agree on the necessity of capital market value-up and minority shareholder protection, but while the ruling party insists on a targeted amendment through the Capital Markets Act under the jurisdiction of the Political Affairs Committee, the opposition party argues for an amendment to the Commercial Act, which applies to unlisted companies as well. Since this is a contentious issue with starkly opposing views from both parties and experts, it is widely expected that reaching an agreement will be difficult.
As the deadlock over the contentious bill continued, the review of the Korea Development Bank Act amendment, which was scheduled as an agenda item for the bill subcommittee that day, was not conducted. This bill mainly aims to increase the authorized capital (the maximum statutory capital that can be increased) of the Korea Development Bank amid a global situation where countries are mobilizing policy finance to support advanced industries. Reviewing the currently proposed bill, both ruling and opposition parties agree on the need for an increase, but differ on the limit of the increase.
Inside and outside the financial investment industry, concerns continue that financial legislative issues may drift due to the uncertain National Assembly schedule amid the impeachment phase. Especially, if the political situation shifts to a presidential election phase, there are concerns that legislative tasks may effectively come to a complete stop. A staff member from a Political Affairs Committee member's office said, "It is uncertain when the bill discussions will resume," adding, "There are ongoing opinions here and there that bills with relatively fewer contentious issues should be discussed first."
Currently, major legislative issues include amendments to the Capital Markets Act linked with the Commercial Act, as well as the Korea Development Bank Act and the Depositor Protection Act. The amendment to the Loan Business Act, which includes provisions invalidating illegal private loan interest, has passed the Political Affairs Committee but the legislative process has effectively stalled.
Meanwhile, bills containing the operational basis for the Alternative Trading System were passed at the bill subcommittee meeting that day. When NextTrade, the country's first ATS, opens on the 4th of next month, stocks will be tradable for 12 hours a day. The amendment includes provisions establishing the operational basis for the ATS along with applying the same rules for public tender offers and other related matters.
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