The government plans to revise related systems so that funds from institutional investors such as pension funds flow into the KOSDAQ market, where individuals' short-term trading is concentrated and speculation has deepened. It also decided to quickly delist poorly performing corporations from the KOSDAQ market and increase the number of listed corporations to help venture and innovation corporations raise funds more easily.

The Financial Services Commission (FSC) said on the 19th in a policy briefing to the president that it will push next year for measures to boost trust and innovation in the KOSDAQ market. The move aims to attract stable institutional funds to shed the stigma of a gambling den and help innovation corporations smoothly raise the funds they need for growth in the KOSDAQ market.

Lee Eog-weon (center), chair of the Financial Services Commission, answers President Lee Jae-myung's question during a joint briefing by the Financial Services Commission and the Fair Trade Commission at the Government Complex Seoul annex on the 19th./Courtesy of Yonhap News

First, the Financial Services Commission (FSC) said it will review incentives and improvements to fund management evaluation criteria to create conditions for institutional investors, including pension funds and KOSDAQ venture funds, to enter the KOSDAQ market in greater numbers. Earlier, groups such as the KOSDAQ Association and the Venture Business Association demanded that the National Pension Service invest 3% of its asset in KOSDAQ. The expectation is that attracting institutional investment, which tends to be long term, to the KOSDAQ market—where individual money is concentrated—could increase market stability.

It also said it will revise listing and delisting review standards for the KOSDAQ market to shift to a "many births, many deaths" structure. The goal is to increase entry into the KOSDAQ market by corporations with strong growth potential and to promptly remove poorly performing corporations to enhance market dynamism.

The government will also support reforms to strengthen the independence and autonomy of the KOSDAQ Division of the Korea Exchange (KRX), while putting in place measures to protect investors by enhancing objectivity in the process of setting offering prices for newly listed corporations and strengthening the responsibilities of lead managers.

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