Were regulatory barriers behind Mirae’s absence from the SpaceX allocation? Industry sources say yes.

[NEWS ANALYSIS]

SpaceX’s blockbuster initial public offering (IPO) has emerged as an unexpected flashpoint in Korea’s financial industry after Mirae Asset Securities, an underwriter for the aerospace company, failed to secure an allocation in what became the world’s largest IPO.

While the financial watchdog is inspecting the brokerage over the fallout, some economists say it reflects regulatory pressure on the brokerage to rein in retail demand for foreign equities amid a weak won — pressure that may also shape Korean brokerages’ participation in future mega-IPOs such as Anthropic and OpenAI.

Mirae Asset Securities — the sole Korean member of the underwriting syndicate and an affiliate of early SpaceX investor Mirae Asset Venture Investment — was allocated 2.31 million of the 555.6 million Class A shares offered in the IPO, according to the SpaceX prospectus. Based on that expectation, the brokerage collected roughly $500 million in subscription orders from selected professional investors ahead of the allocation. Retail investors poured money into Mirae Asset Global Investments’ exchange-traded fund (ETF) tracking U.S. aerospace companies, betting SpaceX would be added to the portfolio soon after its market debut.

But as investors have been left empty-handed, the Financial Supervisory Service launched an inspection of the brokerage to determine whether its internal controls were adequate, given that it promoted the deal before securing an allocation. Industry insiders, however, have a different interpretation.

“It is highly likely that the foreign exchange authorities instructed Mirae Asset Securities to scale back its allocation requests from the start, as there was little need to limit participation given extremely strong demand,” said a finance industry source who agreed to speak on condition of anonymity. Mirae had initially planned to offer SpaceX shares to retail investors — the first such distribution tied to an overseas IPO in Korea — but the plan was abandoned after it failed to meet Korea’s securities registration requirements.

“Financial regulators are increasingly taking a more direct approach to curbing retail demand for foreign equities, going so far as to use the phrase ‘to uproot it completely,’” the source added. “Against this backdrop, allocating shares to a Korean brokerage would have placed pressure on foreign underwriters, given global market awareness that trading activity in Korea is being closely watched by regulators — making Korean brokerages less stable counterparties in their view.”

Under the Lee Jae Myung administration, financial authorities have pushed to steer investors toward domestic equities as the won weakened sharply from the mid-1,300 won range in June last year to above the psychological threshold of 1,500 won, a level it has remained at since mid-May this year. Multiple brokerages anonymously admitted the regulatory pressure to scale back marketing of overseas investment products, with some saying foreign exchange dealers have been called in for closer supervision when buying flows strengthen even slightly. The government even launched a reshoring investment account in March that exempts capital gains tax on foreign-stock sales if the proceeds are reinvested in the domestic market.  

The pressure comes as Koreans’ holdings of U.S. equities jumped significantly to $ 198.95 billion this year, up 22 percent from last year and more than 77 percent from 2024 as of Friday, according to data from the Korea Securities Depository, despite the Kospi more than tripling since the beginning of last year.

Such policy-driven efforts to steer retail capital away from overseas stocks could hinder the internationalization of Korea's capital markets and dampen domestic participation in anticipated blockbuster IPOs, including those of Anthropic and OpenAI, expected later this year, according to Kim Dae-jong, a business professor at Sejong University.

“Authorities should be encouraging domestic brokerages to take a more active role in overseas IPOs and making those offerings accessible to Korean retail investors. Koreans' holdings of foreign stocks are largely dollar-denominated assets, which can also serve as a buffer during periods of foreign-exchange stress,” Kim added.

He noted that Korea’s foreign reserves may not be sufficient, citing a figure of $427 billion as of May and emphasizing that this was “just 22 percent” of the country’s GDP last year. Japan’s foreign reserves as of May were $1.31 trillion, roughly 30 percent of the country’s GDP in 2025.

“Offering shares from major U.S. IPOs to retail investors at the offering price marks a significant step forward for Korea’s securities industry,” said another financial industry source who agreed to speak on the condition of anonymity.

“To participate as a syndicate member, firms must be recognized as credible underwriters and maintain established relationships with global bookrunners. This episode raises questions over whether Korean brokers will gain the standing needed to join future deals as underwriters in the eyes of global bookrunners.”

SpaceX, which went public on the Nasdaq on June 12, raised more than $85 billion from investors. After being first offered to investors at $135, the price rose as high as $225 before closing at $185 on Thursday.

BY JIN MIN-JI [[email protected]]