1. Improve the usefulness of venture holding companies (Article §26, etc.) 

○ Reduce the total asset criteria recognized as a venture holding company from the current 500 billion won to 30 billion won, and in addition to venture companies, “small and medium enterprises whose R&D size is 5% or more of annual sales” shall be included in the subsidiaries of a venture holding company.

○ Extend the grace period for being included in the member companies of a large business group from the current seven years to ten years.

○ In the case where the owner’s family of a group subject to disclosure holds a stake in a subsidiary, second-tier subsidiary, or third-tier subsidiary, prohibit a company from becoming a venture holding company in order to prevent problems such as defrauding private interest by abusing the venture holding company system and require a venture holding company to submit data on internal transactions between a holding company, subsidiary, second-tier subsidiary, or third-tier subsidiary and a related party to the Fair Trade Commission every year.

2. Establish new provisions on the implementation of the CVC system (Article §29, Article 5 (2) 5 (c)) 

○ Being entrusted by the revised Monopoly Regulation and Fair Trade Act, set the upper limit of external funds at 40%, the highest level allowed by the Act, and also extend the grace period for being included in the member companies of a business group for small and medium venture companies receiving corporate venture capital (CVC) funds to 10 years, the same as subsidiaries of venture holding companies.

3. Establish a provision excluding PEF-specialized business groups from the designation of large business groups (Article §36 (1) 5 and 6) 

○ Stipulate that PEF-specialized business groups that have few concerns about the concentration of economic power shall be excluded from the designation as large business groups.

4. Specify the corporate combination reporting criteria based on trading amount (Article §21(8) and (9)) 

○ Being entrusted by the revised Monopoly Regulation and Fair Trade Act, stipulate that the corporate combination reporting criteria based on trading amount shall be the case where the transaction amount is “600 billion won or more” and “products or services are sold or provided to more than 1 million people per month” in the domestic market or “where the domestic R&D budget is 30 billion won or more per year.”

5. Specify the information subject to information exchange rigging (Article §43) 

○ Being entrusted by the revised Monopoly Regulation and Fair Trade Act, stipulate the information subject to information exchange rigging as follows: (1) Cost of goods and services, (2) Quantity of shipment, inventory, and sales, (3) Terms of transaction for goods and services or payment terms of price or consideration.

6. Specify reasons for canceling mitigation or exemption for voluntary reporting (Article §54 (1)) 

○ Being entrusted by the revised Monopoly Regulation and Fair Trade Act, stipulate that the specific reasons for canceling mitigation or exemption from voluntary reporting are as follows: (1) when refusing important statements and submitted materials during a trial process, (2) when submitting false information, (3) when not cooperating faithfully in a trial without justifiable reasons such as non-appearance in court, (4) when filing a lawsuit, denying the fact of a cartel that was voluntarily reported.

7. Rationalize the system for independent management by executives or relatives 

① Mitigate investment requirements for independent management by executives (Article §5 (1) 3 (c))

○ Allow up to 3% (15% for unlisted companies) of ownership in an affiliate of the same person that has been held before appointment only when a person is appointed as a non-standing director of a company belonging to a large business group.

② Strengthen the follow-up management for independent management by relatives (relative separation) (Article §5 (6), Article 6 (3) 2 and 3)

○ Strengthen the follow-up management to submit data even for a company in which a separated relative has newly acquired control within 3 years of relative separation.

Require that the separated relative be restored to the relatives of the same person as original in the case where a company belonging to a large business group is excluded from the regulatory scope for defrauding private interest because the separated relative is excluded from related persons of the same person (1) when the decision on independent management is revoked, or (2) when there is no company controlled by the relative due to liquidation, etc.

8. Rationalize the disclosure system and establish related provisions 

(1) Mitigate the disclosure burden of small unlisted companies (Article §32 (1))

○ Exempt a small unlisted company, which belongs to a business group subject to disclosure that the ownership of an owner’s family is less than 20% and total assets are less than 10 billion won, from the obligation to disclose material facts, such as ownership and governance status and financial structure status.

* However, a company in which more than 50% of shares are owned by a company in which the ownership of an owner’s family is 20% or more shall be subject to disclosure.

② Specify disclosure criteria for the status of overseas affiliated companies (Article §33 (3) through (6))

○ Require the same person to disclose general status (company name, country where an overseas affiliate is located, the date of establishment, and business details), shareholder status, the status of investment in affiliates, etc., of overseas affiliates.

○ “A company which owns an overseas affiliate that directly owns stocks of domestic affiliates by consolidating the stocks (indirect investment) of the affiliate through one or more investments” shall be subject to disclosure.

○ Exempt the obligation for disclosure in cases of the unconsciousness or declaration of the disappearance of the same person, the commencement of adult guardianship, or the prohibition of the provision of shareholder lists under the laws of a country where an overseas affiliate is located.

(3) Specify the resolution of the board of directors of public-service corporations or matters subject to disclosure (Article §31 (2), Article 34)

○ In accordance with entrustment by the revised Monopoly Regulation and Fair Trade Act, similar to the current resolution or disclosure subject by a board of directors for major internal transactions, define the trading partner as a “company whose transaction amount subject to resolution or disclosure by a board of directors is 5% or more or 5 billion won or more of the larger of the total net assets or basic net assets” and in which the ownership of an owner’s family is 20% or more (including subsidiaries under the Commercial Act).”

9. Establish the criteria for imposing an administrative fine related to written surveys (attached Table 10) 

○ Allow the imposition of a fine up to 100 million won for business entities, etc., and up to 10 million won for executives, etc., and differentiate the amount depending on the number of violations in the case of failure to submit data or the submission of false data related to a written survey.

10. Define the entries of the recorded statement (Article §75 (2)) 

○ In accordance with entrustment by the revised Monopoly Regulation and Fair Trade Act, stipulate that the name and address of a person making a statement, the date, place, and contents of the statement shall be entered when preparing a recorded statement.