Yoon vows to bolster minor shareholders’ rights
President Yoon Suk Yeol speaks during a government-hosted town hall meeting on financial policies at the Yeouido office of the Korea Exchange (KRX) in Seoul, Wednesday. Yonhap
FSC to scrap capital gains tax, lower stock exchange tax rate
By Anna J. Park
President Yoon Suk Yeol pledged to enhance shareholders’ rights by institutionalizing online shareholders’ meetings, aiming to amplify the collective voice of minority stockholders. Additionally, he intends to amend the country’s Commercial Act to curb corporate directors from pursuing personal gains.
The comments were made during a government-hosted town hall meeting on financial policies held at the Korea Exchange (KRX) in Seoul on Wednesday. This marked Yoon’s second visit to the bourse operator this month alone, with the first one taking place at the opening ceremony of the first stock trading day of the year on Jan. 2.
“Since my candidacy, I have consistently established and adhered to two principles regarding financial policies. First, we need to further activate the domestic capital market to facilitate the shared growth of the nation and businesses. Second, we need to create a fair financial market by fostering stronger competition to get rid of side effects stemming from financial cartels,” Yoon said during the meeting.
He also stressed the need to revise domestic regulations that no longer align with global standards, committing to revamping tax schemes that lack economic justification.
“In addition, the government plans to institutionalize virtual shareholders’ meetings and seek an amendment to the Commercial Act to deter directors from pursuing personal interests. Furthermore, there are plans to increase the upper limit of payment and the tax-free threshold for the Individual Savings Account (ISA) while broadening the eligibility criteria for account participation,” he said.
It was the fourth town hall meeting this month focusing on the overarching theme of revitalizing the economy for the well-being of the people. These sessions aim to replace conventional annual reporting sessions conducted by each ministry to the president. Additional sessions are planned, featuring discussions among the president, citizens, and experts across diverse policy domains.
Besides key government officials, around 50 people from various walks of life attended the discussion, including financial influencers, retail investors, scholars, entrepreneurs and company employees. They shared their own opinions and suggestions concerning financial policy directions by the government during the meeting.
Financial Services Commission (FSC) Chairman Kim Joo-hyun, standing in front, delivers a presentation during a government-hosted town hall meeting on financial policies at the Yeouido office of the Korea Exchange (KRX) in Seoul, Wednesday. Yonhap
In the meeting, Kim Joo-hyun, chairman of the Financial Services Commission (FSC), the country’s foremost financial regulator, reaffirmed the government’s commitment to ensuring the public’s prosperity and to weed out perpetrators of financial crimes who harm the fairness and transparency of the capital market.
“The government will strengthen the role of the capital market, which is not only a platform for mutual growth between citizens and corporations, but also serves as a ‘ladder for asset formation’ enabling people’s wealth creation,” the FSC chief said.
Specifically, the FSC confirmed that the government will scrap plans to introduce a capital gains tax by 2025. The financial regulator also said it plans to lower the stock exchange tax rate to 0.15 percent by 2025, from the current 0.2 percent.
While the government raises the upper limit of payment as well as a tax-free limit for the ISA, another type of ISA, or ISA2, will be created to focus on investing in domestic shares.
The government said it will also continue to work on establishing a fair and transparent capital market order. During the short selling ban, which continues until June this year, financial authorities plan to set up computer systems to detect illegal short selling practices, while implementing policies to level the playing field for both retail and institutional investors with regard to short selling. Also, stricter investigations and punishments will be applied to root out the motivations for financial crimes.
“The government will rigorously punish unfair trading practices by raising the reward for reporting such crimes to 30 billion won ($22 million) from the current 20 billion won,” Kim said.
In addition, the government vowed to overhaul financial regulations to prevent the abuse of Treasury stocks and convertible bonds exploited by major shareholders for pursuing personal gains, with a goal to create an investor-friendly capital market.
