November 22, 2024

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Kim So-young, vice chair of the Financial Services Commission, speaks in a meeting with officials from institutional investors on March 14, 2024. (Yonhap)

The financial regulator said Thursday it revised a stewardship code for institutional investors to encourage them to join a corporate value-up scheme.

The revised code urges institutional investors to "check to make sure the companies they invest in establish and implement long-term strategies to improve their corporate value," and communicate about such efforts with the market, according to the Financial Services Commission (FSC).

The stewardship code refers to a set of stewardship standards for institutional investors to protect the investment they make on behalf of their clients.

As of Thursday, 222 institutions, including four state-run institutions managing pension and other government funds, had signed on to the pledge that was first introduced in 2018.

The FSC said the revision "provides firm grounds for institutional investors to check if the companies they invest in are taking part in the value-up program and, if not, encourage their participation."

The corporate value-up program was launched late last month, and it seeks to boost the value of local businesses amid the so-called Korea discount, where local shares are traded at prices lower than their fundamentals.

The financial regulator said it seeks to create a new corporate value-up index to be utilized as an investment indicator for institutions by September.

"A virtuous cycle can be created when investors accurately evaluate the efforts of listed firms and make their investment decisions based on such evaluations, encouraging the listed firms to further enhance their efforts to boost their corporate value," FSC Vice Chairman Kim So-young was quoted as saying in a meeting with officials from institutional investors here. (Yonhap)