Purpose: This paper examines the theoretical grounds for the disclosure of the Korea Fair Trade Commission. Three central measures of the disclosure are scrutinized: The interconnected status of affiliate companies, the important matters of private affiliates, and the large internal transactions. Contemplating on three measures, respectively, we review the rationale and derive policy implications. Research design, data, and methodology: Collecting the data of violation rates and remedial measures, we analyze the intensity of the disclosure enforcement. These statistics are critically reviewed by the economic literature of mandatory disclosure. Results: Statistics evince that the Korea Fair Trade Commission has enforced the regulatory disclosure quite successfully. Violation rates of the disclosure has declined from the outset. It demonstrates that the Korea Fair Trade Commission has enforced those measures satisfactorily for about a decade. But we cannot ascertain empirically whether the regulatory disclosures are socially and economically beneficial. To evaluate the effect of the regulatory disclosures precisely, we need a further empirical investigation. Conclusions: Despite the lack of policy evaluation, this study suggests complementary measures for current disclosures. First, disclosure of executive compensation in privately held subsidiaries must be introduced. Second, the controlling shareholder/manager should be responsible for information disclosure on foreign subsidiaries.

Abstract
1. Introduction
2. Enforcement of the Disclosure by KFTA
    2.1. Disclosure of the Business Group Status
    2.2. Disclosure of Privately Held Subsidiaries
    2.3. Disclosure of Large Internal Transactions
3. Theoretical Justification of the Disclosure
    3.1. Asymmetric Information
    3.2. Bounded Rationality
    3.3. Judgment Proof
    3.4. Agency Problem
4. Conclusions
References

• Jae-Hyun GWON(School of Northeast Asian Studies, Incheon National University)