The Korea Exchange (KRX) will push to strengthen sanctions for disclosure violations and offer disclosure incentives to blue-chip corporations to restore trust in the KOSDAQ market. It plans to tighten the demerit-point criteria for false disclosures to lower the threshold for substantive delisting reviews, while also raising listed companies' disclosure capabilities by making English disclosures and governance reports mandatory and supporting regular investor relations (IR).
Kim Sung-cheon, Head of Team at the Korea Exchange (KRX) disclosure department, said on the 3rd at KOSDAQ CONNECT 2026, held at the KRX Conference Hall in Yeouido, Seoul, "Strengthening soundness is important, but preventing inaccurate disclosures is also the exchange's role," adding, "We are also pushing support policies for listed companies."
The exchange recently raised the level of sanctions for disclosure violations significantly. In Oct. last year, it increased the penalty for false disclosures from 4 million won to 10 million won and decided not to apply grounds for reducing demerit points. In particular, starting on the 1st of this month, the system was strengthened so that a demerit score of just 10 points for inaccurate disclosure will trigger a substantive delisting review. Previously, 15 points or more in the past year were required.
Kim, Head of Team, said, "For false disclosures, we view motive as important," adding, "If, after considering materials submitted by the company and explanations, it is reasonably judged that the disclosure could be sufficiently suspected as false, even a single false disclosure can lead to a substantive review, so listed companies need to exercise particular caution."
The exchange also warned against investor misunderstandings regarding disclosures of single sales and supply contracts. It explained that disclosures are not made based on judgments about the business feasibility or whether the news is favorable, but only on whether the disclosure criteria are met.
Kim, Head of Team, said, "Single sales and supply contracts are disclosed if they meet the amount and disclosure criteria," adding, "Whether to interpret the disclosure itself as necessarily favorable is up to investors, and the exchange's role is to provide neutral information."
Disclosure rules have also been repeatedly revised. For stock-linked bonds such as convertible bonds (CB) and bonds with warrants (BW), the obligation was strengthened to disclose counterparties even when they are reacquired before maturity and resold, and disclosures related to conversion price adjustments and conversion requests were expanded.
The treasury stock regime has also been strengthened in stages since the end of last year. Disclosures of treasury share holdings and changes were expanded, and companies are now required to disclose comparisons between acquisition/disposal plans and actual execution results. Starting on the 2nd of this month, the exchange's disclosure standard was changed from the number of shares ordered to an amount-based standard to align with financial authorities' standards.
Alongside tougher sanctions, the exchange plans to expand support for listed companies. Since 2019, it has offered free disclosure consulting, and it is currently providing consulting to the first round of applicant corporations this year. A second round of applications will be accepted soon.
Kim, Head of Team, said, "Where inaccurate disclosures occur because companies don't know the rules, I believe the exchange should provide support," adding, "We view consulting that supports building disclosure systems as having contributed to some extent to reducing inaccurate disclosures."
Going forward, it is also reviewing incentives for blue-chip corporations. For disclosures related to the largest shareholder, a plan is under discussion to ease the disclosure burden to the level of the main board while providing fuller information through governance reports. In addition, for KOSDAQ corporations, it is discussing with policymakers introducing voluntary disclosure of governance reports starting next year and making them mandatory starting in 2028. It also plans to continue supporting a free English disclosure translation service.
The exchange will also push to make IR regular to expand communication between corporations and investors. Kim, Head of Team, said, "KOSDAQ is relatively lacking in providing information investors need, such as preliminary results announcements," adding, "We are discussing making IR regular, focusing on corporations that need ongoing communication with investors, such as newly listed corporations or those listed under special provisions."