FSC Proposes Rule Changes under Revised FSCMA on Valuation Method in M&A Transactions

The Financial Services Commission (FSC) proposed amendments to the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) and the Regulation on Issuance and Disclosure of Securities to introduce fair-value pricing for M&A transactions and strengthen related procedures under the revised FSCMA, which will take effect on December 9, 2026. The proposal will be open for public comments from September 16 to October 6, 2026.

Under the revised FSCMA, when a listed company enters into a merger, a spin-off or split and merger, an acquisition or transfer of a significant business or asset, and a comprehensive share exchange or transfer (each, a “Subject M&A Transaction”), it must calculate the transaction value based on a fair value calculated by comprehensively taking into account the share price, asset value, earnings value, etc.

The revised FSCMA also requires the board of directors of a listed company to prepare and disclose the written opinion for the purpose and expected effect of a Subject M&A Transaction, and the appropriateness of the merger price. The company must undergo an evaluation by an external appraiser regarding matters such as the value of a Subject M&A Transaction, the appropriateness of conditions of the transaction. For M&A transactions between affiliated companies, a listed company must disclose any conflicts of interest or specific relationships between its related parties (under Article 9(1) of the Monopoly Regulation and Fair Trade Act) and the counterparty to the affiliate M&A transaction.