With the government sharply tightening delisting requirements this year, the number of KOSDAQ corporations delisted has surged. President Lee Jae-myung's "normalization of the KOSDAQ market" stance is seen as a factor accelerating this trend.
According to the Korea Exchange (KRX) on the 16th, a total of 23 KOSDAQ-listed corporations have been decided for delisting through substantive reviews so far this year. That is roughly double last year's 12. The number of corporations delisted via substantive review has steadily increased by year: four in 2021, five in 2022 and six in 2023.
Of these, 14 corporations have actually been delisted, with the rest to be finalized as court rulings and other procedures are completed. The number of corporations actually delisted last year was 10.
KOSDAQ delistings are divided into formal requirements and substantive review. Formal delisting is a system in which a company is immediately removed if reasons such as final default, market capitalization below 4 billion won or full capital impairment occur.
By contrast, substantive review is when the exchange assesses a corporation's sustainability and management soundness in a comprehensive manner due to reasons such as embezzlement or breach of trust, suspension of main operations, or a non-unqualified audit opinion, and decides whether it remains eligible for listing. It was introduced to weed out distressed corporations that cleverly evade formal requirements.
The tightening of delisting requirements by financial authorities is cited as the backdrop for this year's surge in delistings. Since Mar., the Financial Services Commission (FSC) has gradually raised the market capitalization and revenue thresholds among KOSDAQ listing maintenance requirements and vastly streamlined delisting procedures.
Accordingly, the substantive review process was reduced from a three-tier system with a two-year improvement period to a two-tier system with one year and six months. The listing maintenance standards are being applied more strictly, requiring more concrete grounds in corporations' improvement plans.
The Lee Jae-myung administration's "KOSDAQ normalization" policy also sped up exits. At the Public Growth Fund report meeting in Sep., the president said, "Normalization of the KOSDAQ market is an important task," adding, "Blue chips and innovative and venture corporations must be properly valued. Market trust has fallen in a situation where low-priced stocks have dominated for decades," emphasizing his intent to make improvements.
The total number of corporations delisted from the KOSDAQ market is also on the rise. According to Korea Exchange (KRX) KIND, the number of KOSDAQ delisted corporations increased to 37 in 2023, 48 in 2024 and 60 in 2025. Excluding SPACs (special purpose acquisition companies), the figures are 15 in 2023, 25 in 2024 and 23 this year.
The tightening of KOSDAQ delisting requirements is expected to continue next year. This is because the market capitalization criteria among the listing maintenance requirements revised by the Financial Services Commission (FSC) will be fully applied. Previously, listing could be maintained with at least 4 billion won in market capitalization, but from 2026 the threshold will be 15 billion won, from 2027 20 billion won and from 2028 30 billion won.
From 2027, the deferred revenue requirement will also apply. KOSDAQ-listed corporations with market capitalization of 60 billion won or less may face delisting if they fail to meet revenue requirements of 5 billion won in 2027, 7.5 billion won in 2028 and 10 billion won in 2029.