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.

On 19 June 2023, the Korean Financial Supervisory Service (FSS) issued a notice according to which domestic employees can be sanctioned for violating the Foreign Exchange Transaction Act if they sell foreign-listed shares through an overseas broker or deposit funds resulting from the sale of foreign-listed shares with an overseas financial institution. To avoid sanctions, domestic employees are required to open an account with a Korean domestic broker, transfer the foreign-listed shares to such account, sell the shares through the domestic broker, and deposit the proceeds into an account with the domestic broker.

The Irish Government enacted the Finance (No. 2) Act 2023 on 18 December 2023, and the new tax withholding and reporting requirements for the exercise of unapproved share options by employees in Ireland will become effective on 1 January 2024.

Despite concerns raised by various industry groups and tax practitioners, the final legislation did not include any amendments, and further guidance and instructions are expected to be issued by Irish Revenue shortly.

In the interim, companies should prepare to comply with these new requirements for any unapproved options exercised by employees in Ireland on or after 1 January 2024.

On 19 June 2023, the Financial Supervisory Service of the Republic of Korea issued a notice which states that domestic employees may be sanctioned for violating the Foreign Exchange Transaction Act if they sell foreign-listed stock through an overseas broker or deposit funds resulting from the sale of foreign-listed stock in an overseas financial institution. To comply with the applicable regulation, domestic employees are required to open an account with a domestic broker and sell foreign-listed shares through such domestic broker.