Companies Delisted for Failing to Meet Market-Capitalization Requirements Allowed to Transfer to KONEX, Supporting Continued Trading

[Financial News] Companies delisted from the Korea Exchange Main Board or the KOSDAQ market for failing to meet market-capitalization requirements will be allowed to transfer to the KONEX market if they meet certain financial requirements.
Korea Exchange (KRX) said it will implement revisions to the KONEX Market Listing Regulations starting on the 23rd. The move reflects the government's plan, announced at a joint meeting of relevant agencies on the 4th to review market conditions, to allow companies delisted for failing to meet market-capitalization requirements to transfer to the KONEX market.
Under the revised regulations, companies listed on the KOSPI Composite Index or the KOSDAQ market that have been designated as management issues solely for failing to meet market-capitalization requirements may apply to transfer to the KONEX market if they satisfy certain financial requirements. Even if they are delisted from their existing market for failing to meet the market-capitalization requirement, their shares may be listed on the KONEX market and continue to be traded.
The financial requirements are that a company must have posted operating profit in at least two of the past three fiscal years, or have posted operating profit in one of the past three fiscal years and have total equity of at least 20 billion won. Both requirements also require that the company not have capital impairment.
An application for prior consultations on a transfer to the KONEX market must be submitted within 40 trading days of the date the company was designated as a management issue for failing to meet the market-capitalization requirement in its existing market. An application for a new listing must be submitted within three business days of the date the delisting cause arose.
An exchange official said, "We will work to mitigate the market impact of stricter delisting requirements for failing to meet market-capitalization thresholds and establish support measures for companies transferring to the KONEX market," adding, "We will actively support these companies so that they can use the move to the KONEX market as an opportunity for a fresh start."

[email protected] Lee Jeong-hwa Reporter