News and developments
Promulgation and Implementation of the Amended MRFTA
to improve the merger review system, the hearing process of the Korea Fair Trade Commission (the “KFTC”) and the corporate disclosure system. Some provisions of the amended MRFTA became effective on February 6, 2024 and February 9, 2024. The remaining provisions are scheduled to take effect on August 7, 2024 and February 7, 2027, respectively.
Under the amended MRFTA, business combinations that are unlikely to raise any anti-competitive concerns (such as establishment of private equity funds (“PEFs”) or mergers between a parent company and its subsidiary) will be exempt from the merger filing obligation. Nevertheless, for business combinations that are likely to raise anti-competitive concerns, the parties involved will be allowed to formally submit remedy proposals, which will be considered by the KFTC when preparing the final corrective orders. The amendment will introduce an electronic system for submitting and delivering documents during the KFTC’s hearing process. In addition, the amendment will (i) ease the burden of overlapping disclosure requirements for companies subject to corporate disclosure requirements, and (ii) raise the minimum annual sales threshold, which is applied when determining a market dominant entity, from KRW 4 billion to KRW 8 billion.
The details of the amendment are as follows:
- Expansion of Merger Notification Exemptions and Introduction of Remedy Proposal Submission System (Effective Date: August 7, 2024)
- Preparation of Legal Grounds for Electronic Submission and Delivery of Documents (Effective Date: February 7, 2027)
- Improvement of Disclosure System (Effective Date: August 7, 2024)
- Increased Threshold for Presumption of Market Dominant Player (Effective Date: February 6, 2024)