1 10 2020
Korea Exchange (KRX) to offer English translation services for the regulatory filings
Multilingualism is attracting attention worldwide as organizations and agencies are trying to attract clients and customers from world around. In the latest decision from Korea Exchange (KRX), the sole securities exchange operator in South Korea, it appears that the country is paying attention to the much required demand for English language. The exchange decided on September 28, 2020, that it would offer English translation services for the regulatory filings of 54 eligible companies.
With the latest decision from KRX some companies like Naver, Samsung Biologics, LG UPlus (formerly LG Telecom), and Hanjin Heavy Industries, among others are going to benefit a lot. The KRX is headquartered in Busan, and has an office for cash markets and market oversight in Seoul and has over 2,300 companies listed. According to the official statement the 54 eligible companies are all listed on the main board of the KRX, the Korea Composite Stock Price Index or Kospi.
Understanding the demand for English Translation
The latest decision from the KRX seems to be driven from the fact that these companies are global in several ways and English being a global language would help not just the companies but the exchange itself. It would also diversify the exchange and help it with compliance as these companies feel it easy to submit their data in English as they are operating at various parts of the world where English is a major language of communication officially.
Interestingly, KRX has four markets in total that include the Kosdaq (electronic stock market, similar to the NASDAQ), the Konex (focused on SMEs), and the derivatives market. Since, each of these have specific requirements from the companies listed with them, each time an eligible company files a public disclosure it is always in Korean. However, now things are going to change as the KRX will designate a language service provider (LSP) to translate the filing into English at its own expenses.
Paying respect to the market share of the foreign investors
Market experts are estimating that the KRX’s decision to provide English translation services has also to do with the fact that the value of foreign-held shares has reached 35% of overall market capitalization on the Kospi. Interestingly, only 5.9% of Korean regulatory filings in 2019 were translated into English for foreign investors. This is a huge gap that the exchange wanted to fill and the latest decision is towards helping the foreign investors sail through easily when investing in South Korea.
To smoothen up the process and make it easy for investors, the KRX has already begun taking applications from companies interested in using the translation service. Needless to say KRX wants to improve foreign investors’ accessibility to the local stock market by offering English translations of Korean companies’ disclosures and make it truly a global stock market. The new feature is expected to help the bourse attract newer investors as ease of investing goes significantly up in coming months.