The venture and startup sector voiced concern over the financial authorities' push to segment the KOSDAQ market and toughen delisting requirements, calling for a delay in implementation and complementary measures.
The Venture Business Association, the Korea Venture Capital Association, and the Korea Startup Forum held a press briefing in Yeouido, Seoul, on the 15th and proposed five policy tasks related to capital market reform under the theme of "a capital market that gets the heart of the innovation economy beating again."
The financial authorities are pushing measures such as strengthening delisting requirements and segmenting the KOSDAQ market to enhance credibility and protect investors. While the venture sector agrees with the intent of capital market reform, it says discussion and safeguards are needed in the design process to ensure the funding function for innovative corporations is not weakened.
In particular, there are concerns that tougher delisting requirements and KOSDAQ market segmentation could worsen market polarization and limit growth opportunities for venture companies.
The three organizations proposed five key tasks: ▲ postponing and reexamining the introduction of KOSDAQ segments ▲ applying exceptions to regulations on duplicate listings ▲ delaying the implementation of delisting requirements and reexamining the criteria ▲ forming a standing policy consultative body ▲ improving the technology special listing system.
First, they demanded a postponement of the segment system that would divide the KOSDAQ market into premium and standard, saying it could lead to corporate rankings and a labeling effect. They argued that regulations on duplicate listings should not be applied uniformly but should consider factors such as corporate independence and the level of protection for general shareholders.
Regarding the delisting system, they said it is difficult to assess the future value of innovative corporations based only on quantitative indicators such as market capitalization, and they requested a delay in implementation and a reexamination of the criteria. They also proposed creating a standing policy consultative body with participation from the financial authorities, the Korea Exchange (KRX), and the venture sector to reflect on-the-ground views in the capital market reform process.
At the briefing, some noted that, for structural improvements in the capital market, not only should regulations be strengthened, but support policies should also be pursued in parallel to enhance the disclosure, accounting, and legal response capabilities of listed venture companies. They said it is necessary to institutionalize the collection of on-site opinions and impact assessments on the industry during policy formation.
Song Byung-jun, head of the Venture Business Association, said, "We fully agree with the financial regulators' direction to improve the capital market's structure, but some detailed policies excessively reflect the traditional finance perspective of control and oversight without capturing the characteristics of ventures and startups."
Kim Hak-kyun, head of the Korea Venture Capital Association, said, "Uniform regulations on KOSDAQ segment separation or duplicate listings will create artificial corporate hierarchies and a funding cliff, paralyzing the venture capital ecosystem," adding, "This round of capital market reforms must not become an obstacle that blocks innovative corporations from scaling up."
Kim Jae-won, chair of the Korea Startup Forum, said, "If the focus is only on exits and regulations, even innovative startups in dire need of funding will be discouraged," noting, "We must clearly distinguish between large corporations' split listings and startups' listings of subsidiaries."