Seoul: The Financial Services Commission (FSC) announced on Friday that stringent regulations will be enacted in early August to address the issue of "split listing" by conglomerates. This move aims to enhance the fiduciary responsibilities of listed companies and protect the interests of ordinary shareholders.

According to Yonhap News Agency, split listing, also known as duplicate listing, involves the separation and independent listing of a core business division. This practice has been identified as a significant factor contributing to the relatively low valuation of local stocks. In response, financial regulators have been formulating policies to prohibit split listing "in principle" and are working to amend related regulations to reinforce shareholder protection.

The new regulations, which will come into effect on August 3, include a stipulation that limits the voting rights of the largest shareholder and associated parties of a parent company to 3 percent, should the company's affiliate be listed. Additionally, more than 25 percent of all issued shares must endorse the split listing.

Furthermore, the board of a parent company will be required to assess the implications of a split listing on its shareholders and devise strategies to guarantee their protection.