(1) Reasons for Proposal

As a follow-up to the Comprehensive Measure to Eliminate Illegal and Unfair Practices in Securities Markets (October 19, 2020), this Partial Amendment aims to improve the conversion price adjustment system and increase soundness in the convertible bond market.

(2) Major Provisions

A. Disclose material information (exercising persons, number of shares to be converted through exercise, etc.) after persons entitled to exercise convertible bond option are determined when stock-listed corporations issue convertible bonds with the rights to buy convertible bonds at a predefined price (convertible bond option) to a third party (Article 4-4)

B. Impose limits on the largest shareholder, etc. to exercise a call option in convertible bonds with call option (Article 5-21)

- Impose limits on the exercise of a call option up to the percentage of shares held at the time of convertible bond issuance when convertible bonds with call option are issued to the largest shareholder and persons with special interest.

C. Improve the conversion price adjustment system (Article 5-23)

- Require the upward adjustment of convertible bonds with adjustable conversion price within the conversion price at the time of issuance in case of a rise in the stock price after a fall.