KRX to introduce tighter IPO, exit rules
SEOUL, Feb. 11 (Yonhap) -- South Korea's bourse operator said Tuesday it will introduce tighter rules for an initial public offering (IPO) and delisting as part of efforts to shore up market confidence.
The Korea Exchange (KRX), the sole operator of the country's stock market, is reviewing a set of enhanced regulations for newcomers and an exit of those who fail to maintain listing requirements.
The Financial Services Commission (FSC) said earlier that from 2026, over 40 percent of IPO shares will be first allotted to institutional investors who guarantee the holdings of IPO shares for a certain period, usually three or six months.
Currently, about 20 percent of IPO shares are sold to such institutional investors to help with the smooth debut of a new company on the stock market.
The FSC has said it will also revamp delisting regulations to speed up the exit of companies that fail to meet a set of requirements.
Starting from 2029, a company whose market capitalization hovers below 50 billion won (US$34.47 million) and has revenues that stay below 30 billion won will be exited from the main bourse.
Currently, a company is delisted when its market capitalization or sales fall below 5 billion won.
Also, the delisting process period will be shortened to a maximum of 2 years from the current 4 years, and a company that receives inappropriate audit reports for two consecutive years will be delisted immediately, according to the FSC.
The KRX said it will make it more attractive to investors via efficient market operations and enhanced rules for investor protection, as the country's secondary bourse operator is set to set sail in March.
The bourse operator also said it will allow 10 financial derivatives products, such as the Korea Composite Stock Price Index (KOSPI) 200 futures, to be traded overnight from 6:00 p.m. to 6:00 a.m., to help investors hedge market volatility.
The KRX will also step up efforts for the Korean stock market to be included in the Morgan Stanley Capital International (MSCI) index.
sam@yna.co.kr
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