Home > Business > Economy

Korea's financial regulator moves to tighten delisting rules, clear out penny stocks

Published: 12 Feb. 2026, 14:44

Kwon Dae-young, the vice chairman of the Financial Services Commission (FSC), speaks at a conference on the government's initiative to transition into productive finance in Seoul, on Nov. 25, 2025. [YONHAP]

Korea's financial regulator said Thursday it plans to strengthen delisting rules to speed up the exit of companies that fail to meet the required criteria.

The move comes as part of efforts to improve the smaller Kosdaq market, accelerate the country's transition to productive finance and facilitate innovative ventures and startup businesses, the Financial Services Commission (FSC) said.

Starting July 1, companies with a market capitalization below 20 billion won ($13.8 million) will be delisted from the Kosdaq market. The threshold will be raised to 30 billion won at the start of next year.

For companies listed in the main Korea Composite Stock Price Index, the threshold will be raised to 30 billion won in July and 50 billion won next year.

Penny stocks, or companies whose shares trade for under 1,000 won, will also be exited from the market starting in July.

Companies in capital impairment, a state in which total liabilities exceed total assets, at the half-year mark will also face delisting, the FSC said. Under current rules, firms face delisting if they are in complete capital impairment at the end of their fiscal year.

The delisting criteria for disclosure violations will be tightened from the current 15 points to 10 points in one year. Companies that commit severe and intentional disclosure violations may be excluded from the market even after a single violation, according to the financial regulator.

Lenient delisting requirements have been a longstanding problem that has limited the growth of the local stock market, especially the smaller Kosdaq, as they have allowed struggling firms to remain listed for years, the FSC said.

A total of 1,353 firms have newly listed on the Korean stock market over the past 20 years, while only 415 firms have been removed, it noted.

The FSC and the Korea Exchange (KRX), Korea's main bourse operator, will run a special monitoring period for companies that might be subject to delisting from Thursday to June.

Under the new rules, the KRX estimates that the number of Kosdaq-listed firms subject to delisting this year could increase to around 150, up from its previous estimate of 50.

Yonhap