법무법인(유한) 율촌 | Yulchon LLC

Yulchon served as legal advisor to the Korea Securities Depository (the “KSD”) on its successful introduction of fractional share trading system after obtaining from the Financial Services Commission a special approval as an innovative financial service.

Under the Korean law, a stock corporation is not allowed to issue fractional shares. As the transfer and registration of fractional shares is impossible, investors were not able to trade fractional shares of a listed Korean stock corporation, despite an increasing demand of investors.

Yulchon helped the KSD develop and obtain special approval for implementing a system to trade fractional shares using trust arrangements whereby it issues beneficiary certificates representing fractional shares based on the shares trusted by securities companies. For this purpose, Yulchon reviewed the structure of the proposed system and advised the KSD on how the requirements under various laws and regulations can be fulfilled and, as a result, the approval was obtained.  Now, investors can trade fractional shares of listed Korean stock corporations further to Yulchon successfully obtaining an approval from the Financial Services Commission.