The introduction of the 'segment system' to classify KOSDAQ-listed companies based on their growth stage and characteristics is being delayed. The Financial Services Commission initially aimed for implementation in January 2027, but is now pushing for a rollout sometime next year. During the 'Korea Premium Week 2026,' specific details were expected to be announced, but the exchange has instead planned to hold a public hearing in the fourth quarter to gather additional market feedback.
On September 29, at the 'Korea Premium Week 2026' session on enhancing KOSDAQ market competitiveness, panelists discussed the direction of the segment system and ways to attract long-term capital into the KOSDAQ market.
Choi Ji-woo, Executive Director of the KOSDAQ Market Division at the Korea Exchange, stated, "We are working to implement a segment system that can more clearly showcase the characteristics and competitiveness of companies within KOSDAQ. We will actively consider market opinions and feedback from various participants in developing this system."
The timeline for the segment's introduction has been pushed back from earlier plans. The Financial Services Commission previously announced in July that it would implement a system to differentiate between excellent and general companies starting in January 2027, but this has now been revised to sometime within 2027. Market participants had anticipated that specific criteria and operational plans for the segment would be revealed during Korea Premium Week, but the exchange indicated that it would finalize the plan through a public hearing in the fourth quarter, where research findings would be shared and further market input would be solicited.
The exchange plans to clarify the criteria for segment inclusion, operational methods, and incentives for each segment following the public hearing and consultations with relevant agencies. However, the details and timeline may change during the feedback and consultation process. Choi emphasized, "We will actively reference market opinions and feedback from various participants to establish the system, aiming to create an environment where innovative companies can continue to grow within KOSDAQ and where investors can more easily find quality companies."
The segment system is designed to categorize KOSDAQ companies based on their growth stages and characteristics, providing investors with clearer information about individual companies and enabling competitive firms to thrive within KOSDAQ. The exchange is considering designating companies that have grown into representative firms among general KOSDAQ companies as 'KOSDAQ Select' and categorizing underperforming companies as 'Management Group.'
In designing the segment system, the 2006 restructuring of the NASDAQ market is cited as a key reference. Choi explained that NASDAQ evolved from being perceived as a secondary market of the New York Stock Exchange (NYSE) to establishing a market structure that aligns with company size, growth stages, and characteristics, ultimately becoming a global hub for advanced technology. Similarly, KOSDAQ aims to foster the growth of innovative companies and create a foundation for nurturing representative firms through the introduction of the segment system.
During the subsequent panel discussion, participants expressed that the segment should not merely categorize companies as 'good' or 'bad.' Kim Jun-man, Executive Director of the KOSDAQ Association, noted, "Concerns among companies may arise from being reassessed or stigmatized in the capital market simply for being included in a standard. Relying too heavily on quantitative metrics like market capitalization or short-term profits could lead to undervaluation of companies with strong technology and future growth potential."
He further suggested that 'Select' should consider growth potential, technological capability, and innovation, and that the standard should also facilitate the inflow of institutional and long-term capital through policy funds, separate indices, and exchange-traded funds (ETFs). He emphasized, "Ultimately, Select and Standard should not separate high-quality companies from low-quality ones, but rather create a structure where companies at different growth stages can grow together."
There was also a call for the supply of long-term capital tailored to the growth stages of KOSDAQ companies. Kang So-hyun, Director of the Capital Market Research Institute, identified the growth of companies and the inflow of long-term capital post-listing as key challenges for the market.
Kang stated, "While the number of innovative companies going public (IPOs) has previously determined KOSDAQ's success, moving forward, it will be crucial to ensure that these companies continue to grow and that policy funds, especially long-term capital, are directed toward these growing firms to achieve KOSDAQ's unique success."
* This article has been translated by AI.
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