[Digital Today reporter Sangyeop Oh] The government and the ruling party have pledged to swiftly process capital market stimulus measures during the February extraordinary National Assembly session, but it is stumbling from the start. Views appear to differ over a third revision to the Commercial Act centred on mandatory cancellation of treasury shares.

The National Assembly's Legislation and Judiciary Committee's Legislation Review Subcommittee No. 1 reviewed the third Commercial Act amendment on Feb. 3, but did not reach a conclusion, the political circle said on Feb. 5.

The Democratic Party had planned to prioritise the bill at a plenary session on Feb. 5, but resistance during subcommittee discussions has fuelled speculation that passage within February has effectively become difficult. The party last year also vowed to pass the third Commercial Act revision within the year, but delayed it.

Kim Yong-min (김용민), chair of the subcommittee, said after the meeting, "There was agreement on creating procedures for disposing of treasury shares, but there were some differences over whether to go as far as making cancellation mandatory." He added, "Considering the local election schedule, early March will effectively be the deadline for passage."

That is a complete change from the mood just days ago. President Lee Jae-myung strongly rebuked delays in capital market legislation, and the Democratic Party's policy committee on Feb. 1 stated, "Our will to process it within the February session is clear." This has prompted criticism that, while it called for a push on the surface, it maintained a passive stance in the legislative working-level arena.

According to minutes from the Feb. 3 subcommittee meeting released by some media outlets, the panel put 14 Commercial Act revision bills on the agenda together and held discussions for about 31 minutes. But six Democratic Party members of the committee, who should lead the legislation as the party line calls for mandatory cancellation of treasury shares, were found to have offered no notable opinions or questions throughout the meeting.

As the core Commercial Act revision is pushed back to March, other capital market support measures being pursued by the government also face the risk of a string of delays.

The government planned in this February extraordinary session to revise the Restriction of Special Taxation Act in step with the Commercial Act revision, to introduce a "Repatriation to the Domestic Market Account (RIA)" to attract overseas stock investment funds back home and to establish a basis for tax support for the "National Growth Fund".

It aimed to generate synergy to boost the stock market beyond an era of KOSPI 5,000 by strengthening shareholder returns through the Commercial Act revision and drawing funds with tax benefits.

But as the Commercial Act revision, the core of the package of bills, drifts due to differences within the ruling party, disruption to the overall policy roadmap has become unavoidable.

A financial investment industry official said, "As the government and the ruling party fall out of step, only uncertainty in the market is growing." The official added, "Incentives such as the RIA and the National Growth Fund are important, but if the party and the government, which are the control tower of policy, cannot send a consistent signal, any measures will be ineffective."