Korea's main bourse operator, the Korea Exchange (KRX), announced Thursday various plans to strengthen its substantive review for delisting to expedite the exit of troubled companies. The move aligns with the government's efforts to revamp the smaller, venture-heavy KOSDAQ into something resembling the Nasdaq in the United States.
The Korea Exchange (KRX), Korea's main bourse operator, announced on Thursday a series of plans to bolster its substantive review process for delisting as part of efforts to hasten the market exit of struggling companies. This initiative comes amid the government's push to overhaul the KOSDAQ, a market dominated by smaller, venture-oriented firms, and model it after the U.S. Nasdaq.
Key proposals include conducting joint reviews for multiple companies under the same controlling shareholder, rather than handling them individually, to accelerate the examination timeline. The KRX will also impose stricter criteria for cases involving complete capital impairment and failures to comply with disclosure obligations.
Companies undergoing substantive review must now demonstrate improvements within one year, a reduction from the current 1.5-year grace period, according to the KRX. The operator established a dedicated team for delisting examinations earlier this month and intends to carry out special monitoring of troubled firms through June 2027.
Last year saw 23 companies delisted, the highest number since 2010, with an average delisting duration of 384 days, the KRX reported. These measures aim to enhance the overall quality of the KOSDAQ market.
