The Listing Regulation of the Stock Market has been revised to incorporate measures for efficient management of new types of back-door listing and modify the provisions relating to listing and exit. The new rules will become effective on December 12, 2005. 2. Key Changes
(1) Strengthened Monitoring of Quasi-Back Door Listing to Raise Integrity and Soundness of the Market
Introduction of the lock-up period for quasi-back door listing(entailing a change in the controlling interest)
- In light of a growing number of new types of back-door listing activities leading to a change in the largest shareholder in a listed company, including a comprehensive stock swap or a stock swap combining business(asset) transfer and third party allocation, which produces economic effects similar to a merger.
- The lock-up restriction(six months) has been newly introduced to regulate the sale of stocks owned by the largest shareholder, etc. in case where such activities result in a change in the controlling interest. If a merger or a comprehensive stock swap involves an unlisted company that fails to meet the financial requirements applicable to a merger case, the lock-up restriction will be tightened to one year from six months. However, if such transaction does not result in a change in the largest shareholder, the lock-up period will be not applied.
- Expected Effects : The revised Listing Regulation is expected to enhance the soundness and integrity of the market and the effectiveness of regulation of back-door listing while promoting and facilitating M&As for corporate restructuring.
