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South Korea: Now enacted – Shares acquired under Employee Share Plans exempt from domestic broker requirement

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In brief

Further to our January 2024 client alert, the anticipated amendments to the Enforcement Decree of the Financial Services and Capital Markets Act (“FSCMA Enforcement Decree“) have been adopted by the Korean government cabinet on 27 February 2024 and promulgated on 5 March 2024. The amendments to the FSCMA Enforcement Decree are therefore effective as of 5 March 2024.

As of 5 March 2024, domestic employees of multinational companies who have acquired shares under a stock-based compensation program may sell such shares without the involvement of a Korean broker and may deposit proceeds from the sale of shares into an account with an overseas financial institution. For any shares sold/funds deposited prior to this date, the previous restrictions applied and these transactions could therefore remain problematic if they did not comply with the restrictions. 

If you have any questions, please contact your Compensation attorney for support.

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Author

Barbara Klementz is the chair of Baker McKenzie’s North American Compensation Practice. She has practiced in the area of global equity and executive compensation for over 20 years. Barbara has authored several articles on global equity issues for the BNA Executive Compensation Journal, Journal of Corporate Taxation and San Francisco and Los Angeles Daily Journal, among others, and she is the author of a blog on global equity related topics called the Global Equity Equation. She is also a frequent speaker on a variety of global equity topics. Barbara is recognized as a ranked practitioner by Chambers USA. Chambers states that she "consistently delivers top-notch assistance and work product, and is a true expert in the field." Barbara is admitted to private practice in California and Düsseldorf, Germany.

Author

Brian K. Wydajewski practices in the area of compensation and employment. He also heads the Chicago Office’s Global Equity Services Practice which assists multinational corporations with the design, implementation and operation of global equity compensation plans. Mr. Wydajewski has authored numerous articles, and is a frequent speaker on employee benefits, executive compensation and global equity compensation issues. In addition, Mr. Wydajewski is past chair of the Illinois State Bar Association’s Employee Benefits Section Council, and is an adjunct professor at the Center for Tax Law and Employee Benefits at the John Marshall Law School.

Author

Denise Glagau is a partner in the Firm's North America Employment and Compensation practice and leads the Compensation practice in the Firm's California offices. Denise has authored several articles and frequently speaks on topics of interest for legal and other professionals dealing with share plan issues. She is on the Advisory Board of the Certified Equity Professionals Institute (CEPI) of Santa Clara University and is a member of the National Association of Stock Plan Professionals (NASPP) and Global Equity Organization (GEO). She is recognized as a ranked practitioner by Chambers USA in the area of Employee Benefits & Executive Compensation. She is also a member of the Firm's Financial Institutions and Healthcare & Life Sciences Industry Groups.

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