President Lee orders 'full review' of ISA reforms, stock price manipulation law
Translated from Korean, summarized and contextualized by DistantNews.
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- South Korean President Lee Jae-myung ordered a full review of the government's proposed changes to the Individual Comprehensive Asset Management Account (ISA) and a 'stock price manipulation prevention law.'
- Investors have protested the ISA reforms, which limit investment to domestic assets and remove the rollover system, narrowing benefits for young and foreign stock investors.
- The stock price manipulation law also faces criticism for potential loopholes that could allow major shareholders to avoid inheritance and gift taxes by artificially lowering stock prices.
South Korean President Lee Jae-myung has ordered a comprehensive re-evaluation of recent government proposals concerning the Individual Comprehensive Asset Management Account (ISA) and a law aimed at preventing stock price manipulation. The directives came after the president was briefed on investor backlash against the proposed financial reforms.
During a situation check meeting with his aides, President Lee expressed strong dissatisfaction with the ISA reforms, questioning the rationale behind their hasty implementation. "Why did you do that without proper preparation?" he reportedly asked, demanding a "full review." The proposed changes to the ISA include the creation of a new account limited to domestic investments and the abolition of the rollover system for existing accounts, along with a reduction in contract periods. These measures have drawn sharp criticism from younger investors and those focused on overseas stock markets, who argue they restrict investment choices and benefits.
Why did you do that without proper preparation? Demand a full review.
President Lee also directed a review of the stock price manipulation prevention law, expressing concern that its design failed to uphold its original intent. The law aims to curb "stock price manipulation," a practice where major shareholders of listed companies intentionally lower stock prices to reduce inheritance and gift tax burdens. The proposed revision increases taxes by over 30% for such cases. However, critics point out potential loopholes, such as companies selectively managing their price-to-book ratios (PBR) over specific periods to circumvent the regulations.
The president's intervention appears to be a direct response to the significant public outcry and concerns raised by investors regarding these financial policy adjustments. The government's proposed reforms have been seen as potentially limiting investor options and forcing a focus on domestic markets, sparking debate about their impact on individual investment strategies and the broader financial landscape.
Why did you not uphold the original intent of the reform and design the system like that? Re-examine it.
DistantNews Editorial
Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.
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