SM Entertainment

Name	Number of Shares	Stake
Soo Man Lee	4,392,368	18.73%
National Pension service	2,003,058	8.54%
Korea Investment Management	1,790,528	7.64%
Alibaba	870,000	3.71%
Others	14,156,410	60.37%
Total	23,450,001	100.00%
Total	23,450,001

Name	Position	Major Experience
Lee, Sung Su	CEO	Head of the Producing Division of SM Entertainment Co., Ltd.
Tak, Young Jun	CMO	Head of the Artist Management Division of SM Entertainment Co., Ltd.
Park Jun Young	Inside Director	Head of the Amusement Planning Division of SM Entertainment Co., Ltd.

Name	Position	Major Experience
Chae Hee Man	Outside Director	Head of the Management Strategy Division of Kumho Electric Inc. Professor for Industry-Academy Cooperation, Dept. of Business Administration, Kookmin University
Ji Chang Hoon	Outside Director	Head of the Freight Business Division of Korean Air Co., Ltd. General Manager of Korean Air Co., Ltd.

Name	Position	Major Experience
Lee Gang Bok	Auditor	Representative Director of CJ Entertainment Co., Ltd. Professor at Dongguk University Business School

Chapter 1 General Rules

Article 1 (Purpose)

The purpose of these provisions is to specify matters related to the comprehensive management and proper disclosure of internal information of SM Entertainment Co., Ltd. (hereinafter, referred to as “Company”) for the prompt and accurate disclosure in compliance with the “Financial Investment Services and Capital Markets Act (hereinafter, referred to as the "Law")” and other related laws and regulations and the prevention of insider trading.

Article 2 (Definition of Terms)

①The disclosure requirements pursuant to Part 1 of the KOSDAQ Market Disclosure Regulations (Hereinafter referred to as "disclosure regulation") and other matters relating to the management or property of the company, refers to matters that may affect investors' investment decisions.
②"Officer in Charge of Disclosure" in this provision refers to a person who is able to perform the reporting task on behalf of the Company in accordance with Article 2 (4) of the Disclosure Regulations.
③"Executives" in this provision refers to the directors (including any person falling under any of the Subparagraphs under Article 401-2 (1) of the “Commercial Act”) and auditors.
④The definition of terms used in these provisions other than those listed in Paragraphs 1 through 3, shall refer to the terms used in related laws and regulations.

Article 3 (Application Scope)

Matters related to disclosure, insider trading, and internal information management shall be subject to these provisions except as provided in relevant laws, regulations, or articles of association.

Chapter 2 Management of Internal Information

Article 4 (Management of Internal Information)

①Executives and staff members shall strictly manage the internal information of the Company that came to their knowledge professionally and shall not disclose internal information inside or outside the company unless necessary for operation.
②The representative director or the officer in charge of disclosure shall take necessary measures to manage internal information such as establishing specific standards for the custody, transmission, and destruction of the internal information and related documents.
③Internal personnel management should be set to prevent frequent changes in the person in charge of public disclosure and/or the representative, and a back-up system of ensuring the replacement of the person in charge of public disclosure should be established.

Article 5 (Officer in Charge of Disclosure)

①The representative director shall appoint a person (hereinafter, referred to as "disclosure officer") who is able to disclose and report information on behalf of the company pursuant to Article 2 Paragraph 4 of the Disclosure Regulations. The same shall apply when the disclosure officer changes.
②The officer in charge of disclosure shall manage all operations related with the establishment and operation of the internal information management system and shall perform the following duties.
- 1.Execution of disclosure
- 2.Inspection and evaluation of the operation of the internal information management system
- 3.Review of internal information and disclosure decision
- 4.Necessary measures for the operation of the internal information management system such as the training of executives and staff members
- 5.Supervision of department or executives/staff members in charge of internal information management or disclosure
- 6.Other duties the representative director deems necessary for the operation of the internal information management system
③The officer in charge of disclosure shall have the following authority in carrying out his or her duties.
- 1.The authority to request submission of documents and records related with internal information and to peruse such documents and records
- 2.The authority to listen to the necessary opinions from the executives and staff members of the department responsible for accounting or auditing, and other departments responsible for the creation of internal information
④If it is necessary in carrying out his or her duties, the officer in charge of disclosure may consult with the executive who is in charge of carrying related duties and may obtain assistance from experts at the expense of the Company.

Article 6 (Person in Charge of Disclosure)

①The representative director shall appoint a person (hereinafter, referred to as "disclosure officer") who is able to disclose and report information on behalf of the company pursuant to Article 2 Paragraph 4 of the Disclosure Regulations. The same shall apply when the disclosure officer changes.
②The person in charge of disclosure shall perform the following in relation to the management of internal information management under the supervision of the officer in charge of disclosure.
- 1.Collection and review of internal information and report on the officer in charge of disclosure
- 2.Operations required for the execution of disclosure
- 3.Determination of tasks required for the management of internal information such as changes in laws and regulations related with disclosure, and reports about the officer in charge of disclosure
- 4.Other matters that the representative director or the officer in charge of disclosure deems necessary

Article 7 (Concentration of Internal Information)

①Directors and department managers shall provide information to the disclosure officer if any of the following applies.

1.Internal information has occurred or is expected to occur
2.If a matter has occurred expected to occur and as a result internal information disclosed needs to be cancelled or modified
3.In the event that there is a request from the officer in charge of disclosure
②The disclosure officer and the CEO shall efficiently establish the information delivery system within the company for the timely provision of internal information pursuant to paragraph 1, and if necessary, cooperate with the disclosure officer in the approval process of the matters related to disclosure obligations.
Article 7-2 (Management of the Largest Shareholder-related Information)

The disclosure officer fully explains the facts to the largest shareholder in order to facilitate the disclosure obligations and inquiry disclosure requirements related to the largest shareholder, and the information delivery system should be established so the information is received in a timely manner.
Article 7-3 (Concentration on Internal Information of Subsidiaries)

①The company shall promptly notify its subsidiaries of its internal disclosure to the company's disclosure officer or disclosure personnel in the event that internal information arises or is expected to arise with respect to subsidiaries.
②In order to efficiently manage internal information related to other disclosure requirements in paragraph 1, the company shall have a person who manages disclosure related information at the subsidiary level. If the company designates or changes such disclosure information, the company shall notify the disclosure officer or disclosure personnel immediately.
③The company may require subordinate companies to submit relevant data to the extent necessary for disclosure.

Article 8 (Providing Internal Information Outside)

①If executives and staff members need to provide inside information to a Company’s trading partner, external auditor, or agent or a person who has signed an advisory contract with the Company such as legal counsel or management consultant for business purposes, they shall report this to the officer in charge of disclosure.
②In case of Paragraph 1, the officer in charge of disclosure shall take necessary actions such as concluding a contract to maintain confidentiality of related internal information.
③If there is a rise in obligation to provide fair disclosure from the provision of internal information, the disclosure must be made without delay. (This does not apply under the case of the exceptions specified in Article 15 of the Disclosure Regulations.

Chapter 3 Disclosure of Internal Information

Article 9 (Type of Disclosure)

Disclosure by the Company is divided into the following.

1.Notification and disclosure of important management matters pursuant to Section 1 of Chapter 2 of Part 1 of the Disclosure Regulations
2.Inquiry disclosure pursuant to Section 2 of Chapter 2 of Part 1 of the Disclosure Regulations
3.Fair disclosure pursuant to Section 3 of Chapter 2 of Part 1 of the Disclosure Regulations
4.Autonomous disclosure pursuant to Chapter 3 of Part 1 of the Disclosure Regulations
5.Submission of securities report, etc. pursuant to Chapter 1 of Part 3 of the Act
6.Submission of business reports pursuant to Articles 159, 160, and 165 of the Act and Section 4 of Chapter 2 of Part 1 of the Disclosure Regulations
7.Submission of the report of important matters pursuant to Article 161 of the Act
8.Disclosure pursuant to other laws and regulations
Article 9-2 (Confirmation of Disclosure Target)

In order to judge whether or not disclosure requirements including disclosure of fairness are necessary in accordance with the regulation, precaution is required to include matters that may affect the share price or investment judgment under Article 6 (1) 4 of the disclosure regulations.

Article 10 (Execution of Disclosure)

① In the event that the person in charge of disclosure has matters to disclose as specified in Article 9, he or she shall prepare the necessary materials and documents and report to the officer in charge of disclosure.
② The officer in charge of disclosure shall examine whether the materials and documents in Paragraph 1 do not violate relevant laws and regulations and report them to the representative director before disclosure.

Article 10-2 (Efficient Execution of Disclosure)

The disclosure officer shall prepare necessary information in the event of the disclosure specified in Article 9, and make an effort to provide necessary documents and disclose it without delay.

Article 11 (Follow-up of Disclosure)

Per Article 30, the person in charge of disclosure and the disclosure officer shall make every effort to act in the most efficient way correct or amend any disclosure information with errors, missing information or changes.

Article 12 (Media Coverage, Etc.)

① If there is a request for an interview from the press, etc., the representative director or the officer in charge of disclosure may accept the request. If necessary, the interview request can be accepted through an officer and a staff member of the relevant department.
②If the company wishes to distribute press release materials to media companies, it shall consult with the person in charge of disclosure. The person in charge of disclosure shall report to the representative director about the matters, as needed.
③If the contents to be distributed for the press release pursuant to Paragraph 2 are subject to fair disclosure, the officer in charge of disclosure shall disclose the contents until distribution of the press release materials.
④If executives and employees read that the distributed media coverage is different from actual facts, it shall immediately be reported to the officer in charge of disclosure, who shall then report this to the representative director and take necessary measures.
Article 12-2 (Confirmation of Contents Distributed to the Media)

The person in charge of disclosure and the disclosure officer as well as the owners of the internal information disclosed shall regularly check the media and take necessary measures if the contents are different from the facts.

Article 13 (Investor Relations)

①The representative director shall realize that IR activities are the management responsibilities of KOSDAQ-listed corporations and make efforts to build trust with financial interests by voluntarily and continuously holding company presentations.

②Company presentations about the management details, business plans, and prospects of the company shall be given after obtaining the approval of the officer in charge of disclosure.

③The officer in charge of disclosure or the person in charge of disclosure shall announce the date, location, and details of the company presentation until the day before the meeting and post the related materials to the disclosure submission system of the Exchange before the presentation.

④ All executives and employees of the company shall use care not to disclose any of the information subject to fair disclosure that has not been disclosed during the company presentation. .

Article 13-2 (Rumor)

①In cases where rumors are circulated in the market, disclosure officer should check whether the contents of the story are true or not by consulting with the related business department.

②Based on the confirmation results under paragraph 1, if deemeed necessary and the relevant information is subject to disclosure requirements pursuant to the disclosure rules, relevant information shall be disclosed.

Article 13-3 (Request for Information)

①When disclosure of information related to the company is requested from shareholders and stakeholders, the disclosure officer should examine the legitimacy of the request and determine the provision of relevant information.

②The disclosure officer may hear opinions from the legal department or external legal experts on whether the information requested to be provided may affect the investor's investment decisions and share prices.

③If information is provided pursuant to the decision of paragraph 1, Article 12-3 shall apply mutatis mutandis.

Chapter 4 Regulation on Insider Trading

Article 14 (Return of Gains on Short-term Trade)

①In the event that executives and staff members as set forth in Article 172 (1) of the Act and Article 194 of the Enforcement Decree of the Act gain profits by purchasing specific securities as set forth in Article 172 (1) of the Act (hereinafter, referred to as “Specific Securities, Etc.”) and selling them within six months or by selling specific securities, etc. and purchasing them within six months (hereinafter, referred to as “Gains on Short-term Trade”), the profit shall be returned to the Company.
②In the event that shareholders of the Company (including those who own equity securities or depository receipts other than shares, the same shall apply in this Article hereinafter) demanded the Company to request the person who earned gains on short-term trade pursuant to Paragraph 1 to return the gains on short-term trade, the officer in charge of disclosure shall take necessary actions within two months after the demand was received.
③In the event that the Securities and Futures Commission notifies the Company of the gains on short-term trade as set forth in Paragraph 1, the officer in charge of disclosure shall immediately disclose each of the following on the Company's internet homepage.
- 1.The status of the person who should return gains on short-term trade
- 2.Amount of gains on short-term trade
- 3.Date on which the Securities and Futures Commission notified that the gains on short-term trade occurred
- 4.Plan to return gains on short-term trade
- 5.This means that a shareholder of the Company may demand the Company to request the person who earned gains on short-term trade to return the gains and if the Company does not make the request within two months after the demand is made, the shareholder may make the request in place of the Company
④The disclosure period set forth in Paragraph 3 is 2 years from the date the Securities and Futures Commission notifies that the gains on short-term trade have occurred or until the date the gains on short-term trade is returned, whichever comes first.

Article 15 (Notification on Sales of Specific Securities, Etc.)

Executives and staff members as set forth in Article 172 (1) of the Act and Article 194 of the Enforcement Decree of the Act shall notify the officer in charge of disclosure of sales or other transactions of specific securities, etc.

Article 16 (Prohibition on Use of Undisclosed Important Information)

Executives and staff members shall not use undisclosed important information (including undisclosed important information of affiliated companies) as set forth in Article 174 (1) of the Act for sales or other transactions of specific securities or let others use such information.

Chapter 5 Supplementary Rules

Article 17 (Education)

①The disclosure officer and the disclosure personnel shall complete training related to the disclosure work pursuant to Article 36 and Article 44 (5) of the Disclosure Regulations, and the disclosure officer shall ensure that the training contents are delivered to the relevant directors and employees.

②The representative director shall make sufficient efforts to the directors and employees, such as the provision of Articles 14 through 16, and the implementation of training to prevent insider trading prescribed by other laws.

Article 18 (Announcement of Regulation)

These regulations shall be made public and available through the company’s website. The same applies when regulations are revised.

Additional Clause

This regulation shall be effective as of September 3, 2009.

This regulation shall be effective as of December 20, 2016.

This regulation shall be effective as of August 17, 2017.