Government delays tougher delisting rules for Kospi, Kosdaq by six months
Smaller Kospi and Kosdaq companies will get six more months to meet higher market capitalization thresholds, with eligible firms offered a smoother move to Konex.
Deputy Prime Minister and Finance Minister Koo Yun-cheol chairs a meeting on market conditions at the Korea Federation of Banks in Jung District, central Seoul, on Sept. 4.MINISTRY OF FINANCE AND ECONOMY
The government has pushed back by six months its planned stricter market capitalization requirements for delisting companies from the Kospi and Kosdaq exchanges. Under the revised timeline, smaller listed companies will now have until the middle of next year to meet the higher threshold, according to a Friday announcement from the Ministry of Finance and Economy.
Companies that meet certain financial conditions will also be able to move to Konex, the Korea Exchange's third and smallest board, set up in 2013 for early-stage small companies with lighter listing requirements. They can transfer at their existing share price, without going through the final trading period that normally precedes a delisting.
On the Kosdaq, the threshold rises from 20 billion won ($14.6 million) to 30 billion won. That increase was due in January and will now take effect in July. The Kosdaq bar had already gone up from 15 billion won in July, and a second rise early next year would have followed within months.
The ministry accepted arguments from the corporate sector that companies and investors need time to adjust, with the Kosdaq trading weakly in recent months. The Kospi threshold, rising to 50 billion won from 30 billion won, moves to July next year on the same schedule, for parity between the two markets.
The transfer route to Konex is designed to soften the blow for companies facing removal. It covers firms designated as administrative issues since July 1 for falling below the market capitalization bar, provided they posted an operating profit in two of the last three years, or in one year while holding equity of at least 20 billion won. Companies whose capital has been eroded by accumulated losses are excluded.
A screen in Hana Bank's trading room in central Seoul shows the Kospi opening on Sept. 4.YONHAP
Qualifying firms can move to Konex without the final trading period and without a reset of their share price. To speed the process, the requirement to appoint a designated adviser, usually a securities firm, will be waived for a set period. The same conditions apply to Kospi companies.
The meeting also took up the risk of rising interest rates at home and abroad. Participants pointed to a combination of pressures: governments issuing more sovereign debt, AI companies issuing corporate bonds, expectations of policy rate increases in major economies and higher oil prices driven by tensions in the Middle East.
They assessed the position of vulnerable borrowers and the mutual finance sector as broadly sound for now, while warning that a sharp further rise in rates would make things harder. The government said it would work to contain excessive volatility in the domestic bond market and press ahead with the support measures for vulnerable borrowers announced on Aug. 28.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
