KOSDAQ Overhaul: Korea Accelerates Delisting of 'Zombie' Firms Amid Corporate Pushback
Market Cleanup: FSC and KRX Tighten the Noose on Underperforming Firms The Financial Services Commission (FSC) and the Korea Exchange (KRX) are moving forward with a high-intensity plan to purge the KOSDAQ market of insolvent 'zombie' companies by 2026. The goal is to transform the junior board into a more dynamic environment for innovative growth firms. However, the proposed speed of these reforms has sparked significant concern among current KOSDAQ-listed companies, who argue that the new rules might be too aggressive for firms attempting to rehabilitate. What Happened: The '4 Major Delisting Criteria' The South Korean financial authorities have introduced a set of rigorous measures aimed at removing low-quality stocks from the exchange. These include: Market Cap Thresholds: Raising the minimum market capitalization requirements. Penny Stock Removal: Introducing delisting criteria for 'penny stocks' trading below 1,000 KRW. Capital Impairment: Stricter rule...