Tougher KOSDAQ and KOSPI Delisting Criteria Deferred by Six Months... KONEX Transfer Route Also Opened

Market Situation Review Meeting Held on September 4

The tightening of KOSPI and KOSDAQ delisting criteria, which aims to remove insolvent companies from the stock market, has been postponed for six months. At the same time, an exit pathway has been introduced that allows companies meeting certain financial requirements to transfer their listing to KONEX without going through liquidation trading.

On September 4, Deputy Prime Minister and Minister of Finance and Economy Koo Yoon-chul held a joint ‘Market Situation Review Meeting’ with relevant agencies at the Korea Federation of Banks in Jung-gu, Seoul, and announced these measures. The meeting was attended by Financial Services Commission Chairman Lee Eogwon, First Vice Minister of Land, Infrastructure and Transport Kim Itak, Financial Supervisory Service Governor Lee Chanjin, and Bank of Korea Deputy Governor Kwon Minsu. They collectively reviewed the trends in domestic and international financial and foreign exchange markets, as well as the real estate market, and discussed how to respond.

Deputy Prime Minister and Minister of Finance and Economy Koo Yoon-chul is presiding over the Market Situation Review Meeting held on the 4th at the Korea Federation of Banks in Jung-gu, Seoul. Ministry of Finance and Economy

At the meeting, the recent trend of KOSDAQ delistings and the future direction of related systems were discussed. Previously, the authorities announced a phased plan to raise the market capitalization requirements for delisting: to 30 billion won for KOSDAQ and 50 billion won for KOSPI, and already made one increase in July. The intention is to filter out poorly managed insolvent companies in order to enhance the overall health of the KOSDAQ and KOSPI markets. According to the original plan, from January 1 of next year, the market cap requirement was set to be raised again—from 20 billion won to 30 billion won for KOSDAQ, and from 30 billion won to 50 billion won for KOSPI.

However, after repeated appeals from companies about the burden of additional increases due to the deteriorating KOSDAQ market conditions, the government decided to delay the scheduled raise by six months, from January to July of next year. The same delay will be applied to the KOSPI market as a matter of fairness and in consideration of similar requests.

Additionally, an alternative has been set up for companies at risk of delisting due to insufficient market capitalization. They can transfer their listings to KONEX without going through liquidation trading. Eligible companies are those designated as management issues after July 1 of this year due to insufficient market cap, who wish to transfer their listing and file an application with the exchange. However, companies with capital erosion are excluded. Companies must meet at least one of the following requirements: post operating profit in at least two of the last three business years, or post profit in one of the last three years while having equity capital of at least 20 billion won. The same requirements will apply to the KOSPI market.

Meanwhile, the meeting also evaluated the recent upward pressure on interest rates. Participants noted that the ongoing pressure is due to increased government bond issuance in various countries and the issuance of corporate bonds by global artificial intelligence (AI) companies, as well as expectations for further policy rate hikes by major economies, and rising oil prices driven by renewed tensions in the Middle East. In fact, international oil prices have climbed amid continuing security concerns, such as the expiration of the U.S.-Iran ceasefire negotiation deadline and recent attacks on ships near the Strait of Hormuz.

In response, the government has decided to closely monitor trends in the domestic bond market and to maintain stability so that market volatility does not become excessive. After assessing the impact of higher interest rates on vulnerable borrowers and the health of mutual finance institutions, participants agreed that conditions are generally favorable so far, but if interest rates rise sharply in the future, challenges could escalate. The government also pledged to steadily implement the support measures for vulnerable borrowers announced on August 28.

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