Korea Exchange Mandates Low-PBR Firms to Disclose 10 Core Indicator Compliance Rates

According to Korea Exchange, the exchange unveiled a draft guidance today requiring listed companies with low price-to-book ratios (PBR) to disclose compliance rates on 10 core indicators. The new rules aim to prevent companies from filing merely formal improvement plans to avoid public listing as low-PBR firms. Companies can be exempted from public disclosure for one year if they submit an enterprise value enhancement plan including PBR improvement targets before the deadline.

The 10 core indicators include three-year PBR targets, PBR improvement action plans, cost of equity versus return on equity comparisons, and shareholder returns through share buybacks and dividends. Additional focus areas are executive compensation tied to PBR improvement, inclusion of PBR in key performance indicators, board reporting and resolutions, and management engagement with shareholders. Korea Exchange will finalize the guidance after a public comment period ending August 24.