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The Fair Trade Commission (FTC) is considering increasing penalty fees for repeated violations of disclosure obligations by large corporations. The Korea Fair Trade Commission (KFTC) announced a proposed amendment to the 'Standard for Imposing Penalties on Non-Compliance with Disclosure Obligations of Listed Companies and Non-Compliance with Non-Material Transactions' (Penalty Regulation) for public comment from August 8th to August 28th.

The main changes include a higher penalty for repeat violations. Under the current regulation, if a company fails to comply with disclosure obligations four to six times in the most recent five years, its penalty is increased by 10%, and by 20% if it violates the disclosure obligations seven or more times. The proposed amendment would increase the penalty to 10% for a first repeat violation, 30% for a second, and 50% for three or more repeat violations.

Over the past five years, more than 50 companies have violated disclosure obligations twice or more, and the current penalty structure has limited effectiveness, according to the FTC. It also plans to eliminate provisions that reduce the penalty by 20% for a first violation or when there were no violations in the past five years.

Additionally, the regulation limiting the penalty based on the size of the company in terms of capital stock is also being removed. The final penalty calculation will consider the financial status of the violating company, and the FTC intends to review stakeholder comments during the public comment period and hold a full committee meeting for deliberation and approval.