Concerns Rise over Profitable Low-Priced Stocks Being Delisted... Lee Okwon Says "Partial Adjustments Under Review"

Lee Ok-won, Chairman of the Financial Services Commission, stated that while it would be difficult to change the policies regarding the delisting requirements for low-priced KOSDAQ stocks, partial adjustments may be considered. This leaves room for potential system improvements in response to concerns that profitable companies should not be delisted from the market simply for being low-priced stocks.

On August 24, during a full session of the National Assembly’s Political Affairs Committee, Chairman Lee responded to Hyun Jung Kim, a lawmaker from the Democratic Party of Korea, who pointed out that even profitable companies could be delisted solely due to their status as low-priced stocks. He stated, “Considering the need for consistent policy, comprehensive changes are not easy,” but also added, “We will review areas where slight adjustments may be possible.”

Yonhap News Agency

Previously, the financial authorities strengthened KOSDAQ regulations to designate companies as management-risk stocks if their share price remains below 1,000 won for 30 consecutive trading days or if their market capitalization falls below the threshold (currently 20 billion won, rising to 30 billion won in January next year). If companies fail to meet the criteria for 45 consecutive trading days out of the subsequent 90 trading days, they will face final delisting.

However, continued worries have been raised that small listed companies generating steady operating profits are at risk of being delisted based solely on stock price and market capitalization criteria. Kim Kimoon, Chairman of the Korea Federation of SMEs, also highlighted that some companies suffer unfairly as their market capitalization declines or become low-priced stocks due to market volatility, regardless of their financial health or business performance. According to Hyun Jung Kim, of the 149 stocks with a market capitalization below 20 billion won as of the end of last month, 45 were confirmed to be profitable companies.

Additionally, Chairman Lee emphasized that he would “accelerate discussions in earnest” on the Digital Asset Basic Act related to stablecoins. When asked whether the government would propose a bill in the fall, he replied, “We will make every effort,” indicating the possibility of legislation within the year. Regarding whether proper stress tests were conducted in the process of introducing single-asset leverage exchange-traded funds (ETFs), which have often been blamed for causing market volatility, he responded that procedures such as selecting ETFs by institution and by stage were followed.

Regarding the potential relocation of the Financial Services Commission to a provincial area, Chairman Lee reaffirmed that nothing has been finalized. He stated, “No decisions or concrete plans have been made regarding the relocation of the financial authorities,” explaining that the Ministry of Land, Infrastructure and Transport, which is in charge of the matter, is currently preparing a plan and is expected to gather sufficient opinions throughout the process.”

This content was produced with the assistance of AI translation services.