Seven KOSDAQ-listed corporations, including FLASK, IM, STACO LINK, The Technology, OliPass, SLS Bio, and CCS CHUNG-BUK CABLE TV COMPANY, are expected to be subject to the 'KOSDAQ two-tier system' for the first time, having been designated as candidates for substantive eligibility review for listing. The financial authorities have improved the delisting criteria for unfit or marginal corporations in the KOSPI and KOSDAQ markets starting this year, which includes reducing the delisting review for KOSDAQ-listed corporations from the existing three-tier system to a two-tier system.
According to the Korea Exchange on the 5th, FLASK, IM, STACO LINK, The Technology, OliPass, SLS Bio, and CCS CHUNG-BUK CABLE TV COMPANY are expected to undergo substantive eligibility examinations under the KOSDAQ two-tier system. MEDICOX is also currently in a situation where grounds for substantive review have occurred, so if it is determined to be subject to review by the corporation review committee, MEDICOX is also expected to be a target for the two-tier system.
Last month, the Korea Exchange amended the KOSDAQ market listing regulation enforcement rules to apply a two-tier system when reviewing grounds for delisting due to substantive examination in the KOSDAQ market. Previously, a three-tier system was applied, consisting of one review by the corporation review committee and two reviews by the KOSDAQ market committee; in the future, this will be reduced to one review by the corporation review committee and one by the KOSDAQ market committee, resulting in a two-tier decision for market exit.
Under the existing three-tier system, the corporation review committee did not have the authority to make decisions. The corporation review committee would only conduct a review of the delisting, forwarding it to the KOSDAQ committee for a decision. If a delisting decision arose at the KOSDAQ committee, the corporation could appeal the exchange's decision, and should an appeal be filed, the KOSDAQ committee would review and decide once again.
In reforming to a two-tier system, the exchange has granted decision-making authority to the corporation review committee. The new system allows the corporation review committee to immediately decide on delisting, and should the corporation appeal, it will be forwarded to the KOSDAQ committee.
While the review process has been reduced, the process remains unchanged for listed corporations to appeal the exchange's delisting decision and to be granted a period for improvement. However, the exchange noted that the reform to a two-tier system intends to expedite the removal of unfit listed corporations, adding that "the delisting period for unfit corporations will definitely be shortened" once the two-tier system is implemented.
Assuming that grounds for substantive examination arose for KOSDAQ-listed corporations while the three-tier system was in place, and that all reviews were completed leading to a delisting decision, it would take a maximum of 120 days. If a period for improvement was granted, this duration could potentially be longer.
In the two-tier system, however, this maximum period is reduced to 100 days, and the procedure for granting a period for improvement is also shortened compared to the current system. The exchange has also reduced the maximum improvement period from two years to one year and six months.