2023-07-06 01:17:02
Documents submitted to the financial supervisory authority for listing on the stock market Securities declaration form. The Financial Supervisory Service, which is reviewing these documents, has poured out complaints from managers at securities firms, which are in charge of initial public offerings (IPOs). Securities company IPO managers raised a problem, saying that the FSS policy for requesting corrections frequently changes during the securities registration report review process, and that even when requests for corrections are made, specific explanations are not heard.
The Financial Supervisory Service (FSS) announced on the 6th that it held a meeting with executives in charge of IPO management of securities companies to listen to difficulties related to the review of securities reports submitted at the time of an IPO and to explain future review procedure operation plans.
KB Securities, Shinhan Financial Investment, Daishin Securities, Mirae Asset Securities, and Samsung Securities, among others, attended the meeting on this day with 17 securities companies that had IPO performance last year.
In order for a company to raise funds through an IPO, it must submit a securities report to the Financial Supervisory Service together with a securities company that is the IPO manager. The purpose is to provide investors with sufficient investment data containing business details and financial status.
It does not end with just filing a securities registration statement. Only after the FSS review and the report becomes effective, can the public offering process, such as demand forecasting and general subscription, be started in earnest.
The executives in charge of IPO management of securities companies who attended the meeting agreed that it is desirable to properly describe important information in the investment decision in the securities report.
However, executives in charge of IPO management said, “There seems to be some confusion as the FSS often changes its policy on requesting corrections during the securities registration review process, and due to this, schedules such as demand forecasting and subscription are changed excessively, leading to deterioration of corporate reputation, negatively affecting subscriptions. can give,” he was concerned.
They also pointed out, “The FSS makes a request for correction right before the effective date of the securities report, but at this time, if you do not hear a specific explanation and receive a correction request, there is a case of misunderstanding that the FSS does not allow listing.”
Regarding the securities companies’ criticism, the FSS emphasized that “there is no way to operate the screening process, such as directly modifying the public offering price or requesting correction for the purpose of canceling the listing.” In addition, when looking at the actual major reasons for correction, it was revealed that it was irrelevant to the fact that the Financial Supervisory Service intentionally requested correction because it did not want to be listed.
Looking at the reasons for the recent corrections in the recent securities registration statement revealed by the FSS, ▲ Comparison companies were selected differently for each comparison year to calculate the public offering price ▲ Transactions with the CEO were not specifically described or risks related to stakeholder transactions were not described ▲ Actual number of safe deposits and securities declarations were not described There is a difference in the number of protected deposits, etc.
Regarding the difficulties that securities companies say, the Financial Supervisory Service said, “Recent market complaints seem to have arisen as schedules were changed in response to correction requests in some IPO cases.” We will look at the impact and promote process improvement.”
The Financial Supervisory Service said, “In the future, when companies and IPO supervisors submit securities reports, the FSS will conduct intensive review within a week, and then at least one face-to-face consultation (for issuers and supervisors) to change the demand forecast date and subscription schedule. will be minimized,” he said.
Meanwhile, the effective date of 14 out of 38 IPO securities statements submitted from January to May of this year was delayed due to the FSS’s request for correction. As a result, the demand forecast date was delayed by an average of 17 days.
The FSS predicted that if the review work is improved, such as intensive review within one week of the submission of the securities registration statement, even if the effective date is delayed due to correction, major schedule changes such as the demand forecast date will be operated within a maximum of one week. As a result, it is analyzed that the predictability of the listing process will increase.
However, the Financial Supervisory Service said, “Despite the focus, IPO cases that do not resolve important investor protection issues (embezzlement and breach of trust, accounting violations, groundless excessive sales and sales prospects, etc.) will be subject to intensive review until the investment risk is sufficiently included in the securities registration statement.” I will,” he said.
The Financial Supervisory Service also urged the manager to do its best in preparing a securities report, such as objective valuation and investment risk description, to enhance trust in the manager’s business, as it is strictly due to due diligence under the law.
He added, “We will continue to hold regular meetings with the organizers to actively listen to the difficulties of the industry, reflect them in the review work, and continue to carry out research and improvement on the overall disclosure review work.”
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