South Korea Financial Services Commission approved revisions to the Korea Exchange listing rules that tighten delisting standards across four areas: market capitalization, low share prices, total capital impairment, and disclosure violations. The changes bring forward higher market capitalization thresholds by six months, create a new delisting trigger for micro-cap stocks trading below KRW1,000, shift capital impairment testing to a semi-annual basis, and lower the annual disclosure demerit threshold for delisting from 15 points to 10 points. Serious and intentional disclosure breaches will become grounds for delisting regardless of prior demerit points. For market capitalization, issuers put on a watch list will still have 90 trading days to recover, but will now need to stay above the relevant threshold for 45 consecutive trading days or face delisting, replacing the previous test based on 10 consecutive and 30 cumulative trading days. The thresholds will rise in two stages, taking KOSPI-listed companies from KRW20 billion to KRW30 billion and then KRW50 billion, and KOSDAQ-listed companies from KRW15 billion to KRW20 billion and then KRW30 billion. For micro-cap stocks, trading below KRW1,000 for 30 consecutive trading days will trigger watch list designation, after which the company must remain above KRW1,000 for 45 consecutive trading days to avoid delisting. Companies on the micro-cap watch list will also face restrictions on share consolidations and capital reductions, including a 90-trading-day ban on another such action if one was carried out in the prior year, and a ban on ratios above 10-to-1 during the 90 days after designation. Total capital impairment at fiscal year end remains an immediate delisting trigger, while mid-year total capital impairment will now be assessed through a delisting review process. The higher market capitalization thresholds, the new micro-cap stock criteria, and the tougher disclosure violation standard will begin from July 1, 2026, with the second market capitalization increase from January 1, 2027. Semi-annual assessment of total capital impairment will start with 2026 semi-annual reporting.
South Korea Financial Services Commission 2026-05-13
South Korea Financial Services Commission approves Korea Exchange delisting rule overhaul with higher market cap thresholds and new KRW1,000 penny stock test
The South Korea Financial Services Commission has approved revisions to Korea Exchange listing rules that tighten delisting standards for market capitalization, low share prices, capital impairment, and disclosure violations. Key changes include higher, phased market capitalization thresholds with longer recovery periods, new micro-cap delisting triggers for stocks trading below KRW1,000 and related limits on share consolidations, semi-annual capital impairment reviews, and lower disclosure demerit thresholds, with serious intentional breaches becoming standalone grounds for delisting. The new standards will be phased in from July 1, 2026, with a further market capitalization threshold increase from January 1, 2027.