A third Commercial Act amendment bill mandating treasury stock cancellation passed the Legislation and Judiciary Committee's bill review subcommittee on the 20th, led by the Democratic Party of Korea. The party plans to finalize legislation as early as this month after a full committee meeting next week.
The amendment, drafted by the Democratic Party's Korea Premium K-Capital Market Special Committee, requires companies to cancel newly acquired treasury shares within one year of purchase. Existing treasury holdings must be cancelled within 18 months of the law taking effect.
"We have been considering institutional reforms with an awareness of whether the capital market will become advanced and innovative and dynamic," Oh Ki-hyung, chairman of the K-Capital Market Special Committee, told reporters after the bill passed.
Seven ruling coalition members of the Judiciary Committee voted in favor, while four People Power Party members opposed, according to sources.
The amendment allows limited exceptions to the cancellation requirement. Companies in public, broadcasting, and telecommunications sectors with statutory foreign ownership limits may dispose of shares within three years of implementation.
Some party members argued for exemptions for venture companies, but this request was not accepted. Legislators prioritized passing the long-delayed bill first, judging that venture-related issues could be addressed later. The K-Capital Market Special Committee has maintained that mandatory treasury stock cancellation should apply regardless of company sector or size.
The Democratic Party plans to bring the bill to the full Judiciary Committee on the 23rd and submit it to the plenary session as early as the 24th.