Hybe, the K-pop giant housing BTS, has become the first Korean entertainment firm to be designated a conglomerate by the country’s antitrust regulator, as its assets swelled big enough to fulfill the same tougher obligations as other large business groups.

The Fair Trade Commission included Hybe along with five other firms in the list of conglomerates Tuesday, thanks to the boy band's enormous popularity and profitability alongside the agency’s active mergers and acquisitions throughout the years.

According to the regulator, the consolidated assets of Hybe’s 65 subsidiaries came to 5.25 trillion won ($3.83 billion), surpassing the minimum designation requirements of 5 trillion won.

Both industry and shareholders are paying keen attention to possible ripple effects from the designation, while Hybe shares plunged around 13 percent over the last month as investors’ concerns grew before the FTC’s Tuesday announcement.

Market watchers say that designation as a conglomerate can be seen as both a risk and an opportunity in the sense that the firm’s obligation to disclose internal transactions and management status now becomes heavier, at the same time it can solidify its position as a market leader in the scene.

From an industrial perspective, it may be welcome for Hybe to be recognized as a conglomerate because inclusion means that the company holds sufficient capital and growth potential.

“The recognition of a company as a conglomerate is an indicator that shows the growth potential and influence of the industry,” an industry source, who asked for anonymity, said. “It means that the entertainment industry is developing, so Hybe’s latest designation has a significant value to it.”

Another K-pop industry official also commented that being designated a conglomerate is an encouraging result compared to the image the entertainment industry previously had -- one where companies conduct business in a poor environment without any specific plans.

From a management perspective, however, Hybe may face many hurdles with the obligation to disclose the stock-holding status of the chief, relatives and executives, as well as the imposition of various regulations regarding internal transactions when spotted.

Considering that Hybe is actively cooperating with its affiliates such as Weverse, a social platform K-pop artists and celebrities use to communicate with fans, and accelerating business linkages using artist IP, internal transaction-related regulations and disclosure pressure may act as a significant burden.

Attention is also focused on whether its artists’ exclusive contract period will be disclosed. There are many cases where entertainment companies completely hide the contract period with artists since it has a significant impact on corporate value, including stock prices. However, Hybe cannot rule out the possibility that the artist's contract status and periods will have to be disclosed.

Although there will be more regulation than before being designated as a conglomerate, the level of regulation that Hybe will face is likely to be weaker than the regulatory intensity of existing mid-sized companies, according to Koh Yoon-ki, a lawyer at the law firm Kohwoo.