Kosdaq to operate under two-tier system next year in bid to reinvigorate secondary bourse

A senior executive at the Korea Exchange (KRX) said Tuesday the bourse operator will implement a two-tier segmentation system in the Kosdaq market next year, in a bid to reinvigorate the secondary stock market.

Choi Ji-woo, a senior executive at the KRX, made the remarks at an investor fair in Seoul.

Under the proposed plan, the listed firms on the Kosdaq market will be divided into two segments — a premium sector for heavyweights and another sector for underperforming firms.

The plan is aimed at "creating a market environment that enables Kosdaq-listed firms to continue to grow and investors to find promising companies in a more efficient manner," Choi said.

Currently, some 1,800 firms are listed on the Kosdaq market, and such segmentation would make the secondary market more reliable, according to Choi.

To boost confidence for investors, the executive said the bourse operator will reform the delisting process for potentially unviable firms on the Kosdaq.

The KRX will hold a public hearing in the fourth quarter of this year to begin work on the proposed segmentation system, Choi said.

Yonhap