The financial authorities said they will launch three structural innovation programs for the KOSDAQ market, which is relatively undervalued compared with KOSPI. The core is to strengthen the KOSDAQ market's "many births, many deaths" structure and create a separate segment that favors outstanding companies.
In addition, the authorities said they will respond firmly to stock price manipulation and other practices that prey on individual investors, shorten the stock settlement cycle after a sale from two trading days to one day (T+1), and pursue paying interest on subscription deposits for initial public offerings, among other steps to fix unreasonable practices in the investment process.
The Financial Services Commission (FSC) on the 15th, in a joint ministry presidential briefing, announced a plan titled "Accelerating financial structural reform to lead an irreplaceable Korea's great leap forward."
The Financial Services Commission (FSC) assessed that the chronic undervaluation of the Korean stock market has eased thanks to efforts to improve the structure of Korea's capital market in the first half. In the second half, it said it will focus on structural improvements so the KOSDAQ market can grow together, while concentrating on tangible system upgrades that enhance investor convenience.
First, policies to invigorate the relatively undervalued KOSDAQ market will proceed at speed. To bring more innovative companies into KOSDAQ, the scope of tailored technology listing exceptions will be expanded. Penny stocks (per-share price under 1,000 won) and listed companies that fall short of market capitalization requirements will be delisted promptly. In addition, the authorities plan to implement in January next year a segment separation that favors outstanding companies within KOSDAQ, while allowing general corporations to coexist.
In September–October, a "Korea Premium Week" event will be held to attract overseas corporations to the domestic stock market.
The Financial Services Commission (FSC) also plans to draw up a roadmap in October to shorten the stock sale settlement cycle. For next year's transition to "T+1," it will overhaul foreign exchange and capital market systems and rules, and it will also discuss ways to secure the cooperation of foreign investors.
Work will also proceed to fix unreasonable practices that individuals feel during investing. The authorities will push to pay interest on IPO subscription deposits and will encourage a reduction in the lending rate for sale-proceeds collateral loans, which securities firms currently offer at around 9% per year. Through an amendment to the Financial Investment Services and Capital Markets Act, they will also discuss prioritizing new IPO shares of a subsidiary for the parent company's common shareholders in cases of dual listings.
In addition, the authorities said they will respond sternly to market-disrupting acts such as stock price manipulation that prey on individual investors.
To strengthen the capacity of investigative officials to respond to unfair trading, they will be given the authority to request communication records, and the scope of assets subject to confiscation of principal will be expanded beyond price rigging to include insider trading and fraudulent trading. Strong investigations and sanctions are also planned for illegal acts by finfluencers, who exert significant influence on individual investment decisions.
Measures will also be prepared to foster conditions for long-term investment. The authorities will publish in November a list of "low PBR" corporations to prevent listed companies from keeping share prices at depressed levels, and in the first half of next year will amend the Financial Investment Services and Capital Markets Act to introduce an ad hoc dividend system.