1. Reason for Revision
- Fractional investment securities, which securitize various underlying assets such as music rights, real estate, and aircraft engines to allow multiple investors to invest, have been institutionalized after going through a regulatory sandbox.
- As fractional investment securities also carry investment risks, information disclosure is crucial for investor protection and establishing a fair market order.
- The importance of information disclosure is particularly high because fractional investment securities are newly introduced, atypical securities whose rights vary depending on the characteristics of the underlying assets.
- It is necessary to properly disclose to investors the type, characteristics, fair valuation, expected revenue streams, investment risks, and trust operation methods of the underlying assets.
- There are concerns about potential harm to investors if the value or rate of return of the underlying assets is unreasonably overestimated, or if investment risks are not adequately disclosed.
2. Main Contents
- Considering their characteristics as new, atypical securities, fractional investment securities are included in the scope of securities that mandatorily require the submission and disclosure of a securities registration statement during a public offering.
- While the submission and disclosure of a securities registration statement during a public offering is the general rule, a small-scale public offering system is currently in operation. This system partially eases the disclosure burden by allowing the replacement of the securities registration statement with a "small-scale public offering disclosure document" for issuances below a certain scale.
- However, due to their atypical nature, complexity, and investor risk, the small-scale public offering system is not applied to investment contract securities and derivative-linked securities. - For these, the submission and disclosure of a securities registration statement are mandatory regardless of the small scale.
- Therefore, just like investment contract securities and derivative-linked securities, the submission and disclosure of a securities registration statement are also made mandatory for fractional investment securities.
