South Korea Expands English Disclosure Rules to Strengthen Market Integrity and AML Defences

South Korea has approved a broad package of regulatory changes aimed at reinforcing the credibility of its capital markets and tightening its anti-money laundering framework, with the Financial Services Commission finalizing the revised rules on January 28, 2026. A central feature of the reforms is a significant expansion of mandatory English-language disclosures for listed companies, a move intended to dismantle long-standing linguistic barriers that have limited international scrutiny of domestic firms. By widening the scope of companies required to publish information in English, the authorities are seeking to curb information asymmetry that can be exploited for illicit financial activity. The rollout will be phased, beginning with an initial expansion in March 2026 and followed by more extensive requirements in May.

At the heart of the new framework is a sharp increase in the number of KOSPI-listed companies required to provide disclosures in English, reflecting the authorities’ push for greater corporate transparency in an increasingly globalized financial system. Companies with assets of KRW2 trillion or more will be required to publish filings in English, ensuring that foreign investors and international oversight bodies can monitor corporate developments without delay. This change will expand coverage from 111 companies to 265 by May 2026, bringing most of the market’s capitalization under enhanced transparency requirements. The obligation applies to 55 categories of disclosures, including material management decisions and fair disclosure items, significantly reducing the scope for major corporate events to remain obscured by language.

The reforms are also designed to minimize timing gaps between Korean-language filings and their English counterparts, which regulators view as a potential avenue for market abuse. Firms with assets exceeding KRW10 trillion will be required to submit English disclosures on the same day as their Korean filings, while those with assets above KRW2 trillion will be given a three-day window. The ultimate objective is near-simultaneous reporting across languages, a step the Financial Services Commission considers critical for detecting suspicious transactions and preventing money laundering by enabling cross-border compliance checks before illicit funds can be transferred through layered financial structures. To support companies during the transition, the regulator has committed to providing advanced translation tools and standardized glossaries to reduce the risk of inconsistencies that could be exploited to conceal non-compliance.

The accelerated timeline toward full market coverage signals a long-term shift in South Korea’s approach to financial risk management. By March 2027, all 848 KOSPI-listed companies are expected to fall under the same disclosure standards, closing off opportunities for “regulatory shopping” in which illicit actors shift activities to smaller or less transparent firms. Standardizing disclosure obligations across the entire main board is intended to create a unified defence against the entry of criminal proceeds into the formal economy, while supporting South Korea’s efforts to maintain strong standings in global financial integrity rankings and attract stable foreign investment.

The revised rules also address vulnerabilities surrounding executive compensation, which regulators see as a potential channel for embezzlement or concealed financial misconduct. Companies will now be required to present side-by-side disclosures of executive remuneration, operating profits and total shareholder returns over a rolling three-year period. The aim is to expose discrepancies between management pay and company performance that may indicate fiduciary breaches or improper financial flows. Firms must provide detailed explanations for salaries, bonuses, retirement payments and other benefits awarded to senior executives, enhancing the ability of regulators and investors to assess whether compensation aligns with business outcomes.

Stock-based compensation is also brought squarely into the main disclosure framework. Instruments such as restricted stock units and stock appreciation rights, which were previously disclosed separately or in fragmented form, must now be reported with their cash value clearly stated, including unvested awards. By consolidating all forms of executive pay into a single, transparent disclosure, the Financial Services Commission aims to eliminate opaque structures that could be used to disguise kickbacks or launder funds through equity-linked schemes. This comprehensive approach is designed to strengthen oversight by audit committees and external authorities alike.

Greater transparency around executive pay is expected to deter commercial bribery and misuse of corporate resources by making it easier to compare the accumulation of executive wealth with company performance. The new disclosures are intended to be machine-readable and comparable across fiscal years, enabling regulators to deploy data analytics to identify anomalies more efficiently. This shift toward technology-enabled oversight marks a broader modernization of South Korea’s anti-money laundering regime, moving away from reliance on manual checks toward continuous, data-driven monitoring.

Shareholder oversight is another area targeted by the reforms, with new disclosure requirements aimed at improving transparency around annual general meetings. From March 2026, companies will be required to publish detailed voting results for each agenda item, including the proportions of votes cast in favour, against and abstaining. This replaces the previous practice of disclosing only whether resolutions passed or failed, and is intended to help regulators and investors identify the influence of undisclosed beneficial owners who may be seeking to exert control for illicit purposes. Public voting data makes it easier to detect patterns that diverge from the interests of legitimate shareholders and may point to hidden ownership structures.

By requiring the number of shares associated with each voting outcome to be disclosed in periodic business reports, the authorities are creating a durable record of corporate decision-making that can be examined retrospectively by investigators and forensic accountants. Same-day disclosure of voting results is intended to ensure that suspicious behaviour can be identified promptly, rather than emerging months later in aggregated reports. This emphasis on immediacy reflects the regulator’s view that speed is essential in modern financial supervision.

The combination of expanded English disclosures and granular voting data is expected to enhance the ability of international institutional investors to engage actively in Korean corporate governance. As foreign shareholders bring stricter compliance expectations and lower tolerance for irregularities, the Financial Services Commission sees an informed investor base as a critical complement to regulatory oversight. By providing comprehensive information in English, the government is effectively enlisting market participants as additional monitors of corporate conduct, strengthening defences against financial crime through a collaborative public-private approach.

Taken together, the reforms underscore South Korea’s broader ambition to align its regulatory framework with leading global standards and address long-standing concerns over corporate governance that have contributed to the so-called “Korea Discount.” Mandatory English reporting and enhanced transparency around executive pay are expected to reduce perceived governance risks and attract higher-quality foreign capital, making illicit financial flows easier to distinguish from legitimate investment. Looking beyond 2027, the full integration of the KOSPI market into a multilingual, technology-enabled disclosure system is expected to serve as a model for other emerging markets, with the Financial Services Commission indicating that the rules will continue to evolve in response to market feedback and changing financial crime risks. The effectiveness of the reforms will ultimately hinge on strict enforcement and meaningful penalties for non-compliance, but regulators expect the changes to drive a cultural shift in which transparency becomes a core obligation for participation in global capital markets, reinforcing South Korea’s position as both a high-growth and high-integrity economy.

By fLEXI tEAM