The Financial Services Commission (FSC) is set to accelerate structural reforms in the KOSDAQ market by introducing a segment system next year and establishing a new dividend system that allows companies to distribute dividends as needed. The FSC aims to swiftly remove underperforming companies while supporting the listing of innovative firms, improving the market's structure through measures such as banning dual listings and disclosing companies with low price-to-book ratios (PBR), thereby fostering a long-term investment environment centered on shareholder value.
On July 15, the FSC presented its key capital market policy initiatives during a briefing at the Blue House, highlighting the 'Three Major Structural Innovation Programs for KOSDAQ' and the promotion of a shareholder value-oriented corporate culture. President Lee Jae-myung has identified the normalization of the stock market as a core national agenda, emphasizing the need to focus policy efforts on restoring market confidence and enhancing KOSDAQ's competitiveness.
The FSC announced plans to enhance both trust and growth in the KOSDAQ market by quickly removing underperforming companies and creating a structure that facilitates the entry of innovative firms. Starting this month, the commission has tightened delisting criteria, particularly for penny stocks, and plans to expand technology-based special listings tailored to company characteristics in the second half of the year.
A segment system will also be introduced to differentiate between high-quality and general companies in the KOSDAQ market. The FSC is currently developing detailed classification criteria and aims to implement the system in January 2027 after announcing follow-up measures. Additionally, starting in September, the FSC will enhance support for investor relations (IR) for KOSDAQ companies to improve access for investors to high-quality firms.
The FSC is also focusing on establishing market order. To strengthen its capacity to respond to unfair trading practices such as stock manipulation, insider trading, and fraudulent transactions, the commission plans to grant investigators the authority to request communication data and expand the scope of capital market law amendments to include not only market manipulation but also insider trading and fraudulent transactions. Monitoring of false information dissemination and exaggerated disclosures will be intensified, and illegal activities by so-called 'finfluencers' will be targeted for crackdown.
Improvements aimed at enhancing shareholder value are also set to begin. Starting in November, the FSC will implement a system to disclose companies with a PBR below industry standards, encouraging firms to voluntarily enhance their value. This initiative is part of a broader 'anti-price suppression' policy to publicly identify undervalued companies and promote efforts for improvement.
The FSC will also pursue a ban on dual listings to protect the rights of general shareholders. Proposed amendments to regulations will clarify the duty of parent company boards to act in the best interests of shareholders and establish procedures for shareholder consent and criteria for dual listing exceptions, with implementation expected to begin this month.
Changes to the dividend system are also on the agenda. The FSC plans to introduce a system in the first half of 2027 that allows companies to distribute dividends as needed, without being restricted to quarterly or semi-annual schedules. Furthermore, companies will be encouraged to disclose dividend decisions at least six weeks before shareholder meetings, allowing shareholders to assess the dividend size before deciding on proposals. The electronic shareholder meeting platform by the Korea Securities Depository is also set to be established in the fourth quarter to enhance the convenience of exercising shareholder voting rights.
President Lee Jae-myung emphasized the need to accelerate capital market reforms during the briefing, stating, "Normalizing the stock market is very important. Necessary measures should be taken swiftly, even in the face of resistance, and new systems that may cause controversy should be implemented cautiously to avoid side effects." He particularly highlighted the KOSDAQ market as a space that should provide opportunities for new companies with growth potential, stressing the importance of filtering out underperforming firms. He also urged for expedited progress on the so-called 'anti-price suppression law,' which has faced legislative delays.
* This article has been translated by AI.
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