The listing improvement period that can be granted by the corporate review committee and the listing disclosure committee while a listed corporation on the Korea Composite Stock Price Index (KOSPI) undergoes delisting review is reduced from a maximum of two years to one year. The improvement period for the Korea Securities Dealers Automated Quotations (KOSDAQ) market is also shortened from a maximum of two years to one year and six months.
The Korea Exchange noted on the 27th that it has revised the implementation rules for listing regulations on the KOSPI and KOSDAQ markets. The Korea Exchange previously announced improvements to the initial public offering (IPO) and delisting systems in collaboration with the Korea Financial Investment Association and the Capital Market Research Institute, and decided to first implement matters that only require amendments to the implementation rules.
The revised implementation rules include provisions for separately processing procedures in the event that multiple grounds for delisting arise. Issues such as refusal of audit opinions are formal delisting grounds, while embezzlement and breach of trust are substantial review grounds, indicating that each will be examined separately. If either ground leads to a delisting decision, the delisting occurs immediately.
In addition, if a corporation listed on the KOSPI receives a negative audit opinion (limited, inappropriate, refusal of opinion, etc.) and then receives a proper audit opinion in the following business year, a substantial review will still be conducted. This has been implemented on the KOSDAQ market but has now been expanded to the KOSPI market.
The revised implementation rules will take effect from March 4th. The Korea Exchange plans to amend the listing regulations by the second quarter of this year (April to June) to improve the delisting system.