The Korea Financial Investment Association noted on the 19th that it has amended its operating regulations to include the establishment of a delisting designated company department within the K-OTC market to improve the trading base for delisted stocks.
The delisting designated company department supports transactions for stocks that have been delisted from the KOSPI and KOSDAQ markets for six months. Stocks designated by the delisting designated company department can be traded through securities companies' home and mobile trading systems (HST, MTS), just like registered and designated company stocks. The price at the time of the transaction's start is determined by the lower price between the closing price of the last transaction formation date before delisting and the arithmetic mean of the closing prices of the last three transaction formation dates before delisting, with a price limit of ±30% from the reference price.
To become a designated stock in the delisting designated company department, it must meet the following requirements: ▲ An audit opinion on the recent settlement of accounts must be appropriate or limited (excluding limitations on the scope of the audit); ▲ There must be no issues with stock transfers; ▲ There must be no issues affecting the company's existence, such as bankruptcy.
The target for support is stocks that are delisted after the effective date of the amended regulations on Jan. 2, 2026. The association plans to newly designate stocks confirmed to meet the requirements within the following month after the delisting. Corporations that do not meet the designation requirements and fail to enter the delisting designated company department can also be reviewed for designation if they prove to have met the requirements within one year from the delisting date.
The designation cancellation is generally conducted on the first business day after six months have passed since the first trading transaction, but mid-term cancellations are possible if necessary for investor protection due to reasons such as dissolution.
Lee Hwan-tae, the head of the industrial market division of the Korea Financial Investment Association, stated, "Through the establishment of the delisting designated company department, we expect to provide a safe trading base for delisted stocks to enhance transaction continuity for investors and to provide recovery opportunities for corporations." He added, "The association plans to continually work to improve the trading environment, such as expanding the number of securities firms available for transactions to ensure there are no inconveniences in trading."