South Korea's Financial Services Commission announced that the National Assembly has passed amendments to the Financial Investment Services and Capital Markets Act that introduce a cornerstone investor system and permit preliminary book building for initial public offerings. The changes carve out exemptions from the current restriction on soliciting subscriptions before a securities registration statement is filed, allowing bookrunners to sound out demand (including price and quantity) when setting an initial IPO price band. The new cornerstone investor framework enables pre-allocation of shares from the institutional investor tranche to investors committing to a lockup of at least six months, with the cornerstone portion to come from the institutional allocation rather than the retail allocation (25%), and the institutional allocation described as 50% for KOSPI and 15–35% for KOSDAQ. The revised act will take effect six months after promulgation. In the interim, the government plans to develop detailed subordinate rules covering preliminary book building, an allocation cap for cornerstone investors, and measures to prevent conflicts of interest.
South Korea Financial Services Commission 2026-04-23
South Korea Financial Services Commission announces National Assembly passage of IPO reforms introducing preliminary book building and cornerstone investors
South Korea’s Financial Services Commission announced that the National Assembly passed amendments to the Financial Investment Services and Capital Markets Act introducing a cornerstone investor system and permitting preliminary book building for IPOs. The reforms allow bookrunners to gauge demand before filing a securities registration statement and enable pre-allocation of shares from the institutional tranche to investors agreeing to at least a six-month lockup, with subordinate rules to be developed on book building, cornerstone allocation caps, and conflict-of-interest safeguards.