South Korea delays listing-threshold increase and opens KONEX transfer route for at-risk firms

  • South Korea delayed higher KOSPI and KOSDAQ market-capitalization requirements by six months.
  • Thresholds will rise to 30 billion won on KOSDAQ and 50 billion won on KOSPI.
  • Eligible companies can transfer to KONEX without liquidation trading if financial conditions are met.

South Korea will delay by six months a planned increase in the minimum market capitalization required to remain listed on the KOSPI and KOSDAQ, shifting the next step from January to July next year. The thresholds had been set to rise from 20 billion won to 30 billion won on the KOSDAQ and from 30 billion won to 50 billion won on the KOSPI after the KOSDAQ bar had already moved up from 15 billion won in July. Eligible companies designated as administrative issues since July 1 for falling below the market-capitalization bar may transfer to KONEX, the Korea Exchange’s smaller board, at their existing share prices without a final trading period if they posted an operating profit in two of the last three years, or in one year with equity of at least 20 billion won; firms whose capital has been eroded by accumulated losses are excluded. The designated-adviser requirement will be temporarily waived to speed transfers, and the same conditions apply to KOSPI companies. The package was reviewed on September 4 at a market-conditions meeting chaired by Deputy Prime Minister and Finance Minister Koo Yun-cheol, which also addressed rising rate risks and support measures for vulnerable borrowers announced on August 28. Separately, Korea Exchange will lower the quarterly KOSDAQ market-maker compliance threshold from 90% to 80% for fourth-quarter evaluations while retaining the daily quoting-hour standard.

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