Korea Exchange (KRX) said on the 27th that it has begun drawing up a compensation plan for investors who suffered losses due to a market action error involving SCM Lifescience.
To ensure objectivity and fairness in the compensation standards, the exchange plans to set up an external expert panel tentatively called the "Compensation Review Committee" early next month. It also plans to finalize compensation standards after consulting an outside law firm.
The website overhaul to accept damage compensation applications is scheduled to be completed in mid-next month. The exchange plans to provide detailed guidance on the compensation standards and application procedures as soon as the overhaul is finished.
Earlier, at around 7 p.m. on the 16th, the exchange mistakenly announced the lifting of the management issue designation, judging—based on an audit report submitted by SCM Lifescience—that the conditions for lifting had been met. The next day, on the 17th, it identified the error during verification and, considering the possibility of investor losses, re-designated the issue as a management issue during trading hours (2:28 p.m.).
A management issue is designated to warn of investment risk when a listed company's financial condition or business situation is poor and may fail to meet listing maintenance standards. Conversely, being lifted from management issue status is taken as a signal that financial or business problems have been partially resolved and the issue has returned to normal status. For this reason, whether an issue is designated or lifted can directly affect its share price.
The exchange also plans to pursue institutional improvements in parallel to prevent a recurrence of similar cases and strengthen investor protection.