SEOUL, September 04 (AJP) -South Korea will push back tougher delisting rules for the KOSPI and KOSDAQ to July 2027 from the scheduled January, delaying a planned increase in minimum market-capitalization thresholds as authorities seek to give the market more time to recover.
The decision was made at a joint market review meeting chaired by Finance Minister Koo Yun-cheol on Friday, where officials also assessed rising bond yields, vulnerable borrowers and risks in the mutual finance sector.
The market-capitalization threshold for delisting at the junior market was raised to 20 billion won ($14.4 million) from 15 billion won on July 1 and had been scheduled to rise again to 30 billion won in January 2027.
The second increase will instead take effect in July 2027 as authorities said listed companies and the market needed more time to adjust.
The same six-month delay will apply to the Kospi, where the threshold was raised to 30 billion won from 20 billion won in July and had been scheduled to increase to 50 billion won in January.
Authorities will also allow companies that meet certain financial requirements to transfer to the Konex market without undergoing a liquidation trading period, reducing the disruption caused by delisting.
Eligible companies must have been designated for administrative issues since July 1 after falling below the market-capitalization threshold.
They must have posted operating profits in at least two of the past three years, or recorded a profit in one of those years while holding equity of at least 20 billion won. Companies with impaired capital will be excluded.
The government said the same KONEX transfer rules will apply to eligible KOSPI-listed companies.
Officials separately reviewed rising interest-rate pressure stemming from increased sovereign debt issuance, corporate bond sales by global artificial intelligence companies, expectations for policy rate hikes in major economies and renewed tensions in the Middle East.
West Texas Intermediate crude rose to $91.30 per barrel on Sept. 3 from $69.50 at the end of June, adding to upward pressure on market rates.
Authorities agreed to closely monitor South Korea's bond market and act to prevent an excessive increase in volatility.
They said the financial health of vulnerable borrowers and the mutual finance sector remained broadly sound, but warned that a further sharp rise in interest rates could add to strains.
The government will also proceed with support measures for vulnerable borrowers announced on Aug. 28.
AJP Takeaways
• South Korea will delay tougher Kospi and Kosdaq delisting thresholds by six months to July 2027 from January. The government said the postponement is intended to give listed companies and the broader market more time to recover.
• Authorities also unveiled easier Konex transfer rules for some delisting candidates while stepping up monitoring of bond-market volatility and vulnerable borrowers.
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