S. Korea to tighten de-listing rules, remove penny stocks starting July

▲ In this file photo provided by the Korea Chamber of Commerce and Industry on Nov. 25, 2025, Kwon Dae-young, the vice chairman of the Financial Services Commission (FSC), speaks at a conference on the government's initiative to transition into productive finance in Seoul. (PHOTO NOT FOR SALE) (Yonhap)

FSC-de-listing rules

S. Korea to tighten de-listing rules, remove penny stocks starting July

SEOUL, Feb. 12 (Yonhap) -- South Korea's financial regulator said Thursday it plans to strengthen de-listing rules to speed up the exit of companies that fail to meet necessary requirements.

The move comes as part of efforts to improve the smaller KOSDAQ market and accelerate the country's transition to productive finance, and also facilitate innovative ventures and startup businesses, the Financial Services Commission (FSC) said.

Starting July 1, companies whose market capitalization is below 20 billion won (US$13.8 million) will be exited from the KOSDAQ market. The threshold will be raised to 30 billion won at the start of next year.

For companies listed in the main Korea Composite Stock Price Index (KOSPI), the threshold will be raised to 30 billion won in July and 50 billion won next year.

Penny stocks, or companies whose shares are traded at under 1,000 won, will be exited from the market starting July as well.

Companies in capital impairment, a state of total liabilities exceeding total assets, at the half-year mark will also face de-listing, the FSC said. Under current rules, firms face de-listing if they are in complete capital impairment at the end of its fiscal year.

The de-listing criteria for disclosure violations will be tightened from the current 15 points to 10 points in one year. Companies that commit severe and intentional disclosure violations may be exited from the market even after single violation, according to the financial regulator.

Lenient de-listing requirements have been a long-standing problem that limited the growth of the local stock market, especially the smaller KOSDAQ, as they allowed struggling firms to remain listed for years, the FSC said.

A total of 1,353 firms have newly listed on the Korean stock market over the past 20 years, while only 415 firms have been removed, it noted.

The FSC and the Korea Exchange (KRX), South Korea's main bourse operator, will run a special monitoring period for companies that might be subject to de-listing from Thursday to June.

Under the new rules, the KRX estimates that the number of KOSDAQ-listed firms subject to de-listing this year could increase to around 150 from the previous estimate of 50.

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