South Korea’s Financial Services Commission published a package of measures to boost confidence and innovation in the KOSDAQ market, spanning governance changes at the Korea Exchange, a redesigned listing and delisting framework, steps to attract institutional investors, and strengthened investor protections related to dual listings and IPO pricing. The package would tighten the Korea Exchange’s KOSDAQ governance through new career and professional requirements for KOSDAQ Market Committee members, a revamped performance evaluation that assesses the KOSDAQ division separately and links outcomes to incentives, and a review of organizational and staffing needs. On market entry, the technology-tailored special listing process would be expanded beyond biotech to include artificial intelligence, aerospace, and energy (energy storage systems and new and renewable energies), supported by a new adviser pool of about 60 technology experts, alongside regulatory changes intended to avoid inadvertent public offering rule breaches from early-stage venture investments that can delay listings. On market exit, a “strict-and-prompt-exit” approach would be reinforced by expanding delisting review teams from three (16 staff) to four (about 20 staff), subjecting tech special-listed firms to delisting review if they switch core business to an unrelated field within five years, and raising the minimum market capitalization requirement to remain listed to KRW15 billion from KRW4 billion from January 2026; the FSC cites simulations indicating 14 companies would be in scope for delisting review in 2026, rising to 165 companies (9.5 percent of KOSDAQ-listed firms) by 2029 when upward adjustments are completed. To broaden institutional participation, the FSC would increase the tax benefit for KOSDAQ venture funds (currently KRW30 million) and consider a tax benefit for business development companies effective from March 2026, expand the preferential allocation of IPO shares to KOSDAQ venture funds to 30 percent from 25 percent, allow 42 asset managers to run BDCs without separate approval and permit venture capital firms to manage them with more flexible authorization requirements, and encourage major pensions and securities firms to raise KOSDAQ participation and research coverage. Investor protection measures include codifying clearer dual-listing review criteria in listing rules beyond split-off cases, wider use of IPO put-back options allowing retail investors to sell shares back to bookrunners at 90 percent of the issue price, comparative disclosure of estimated versus actual performance when estimates are used in pricing, and support for legislative discussions to amend the Financial Investment Services and Capital Markets Act to introduce cornerstone investors and preliminary bookbuilding. The FSC indicated that detailed tax support and pension evaluation changes would be prepared in early 2026. The new special-listing criteria for the three added sectors are to be prepared within 2025, with the framework expected to expand to additional industries in 2026, and the corporate value enhancement plan disclosure requirement for tech special-listed firms seeking delisting exemptions would apply to companies applying for IPO after Korea Exchange rule changes take effect in the second quarter of 2026.

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