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Biz News Korea(Eng)
KRX to ease Kospi entry rules to facilitate listing and toughen exit rules by March
- Collected
- 2017.01.20
- Distributed
- 2017.01.23
- Source
- Go Direct
The securities exchange operator will be revising listing rules to allow firms to go public more easily. Under the eased rules, companies with a profit of more than 2 billion won in the preceding year will be able to go public, lower than current requirement of more than 3 billion won in profit and 100 billion won in revenue.
The revision would come amid complaints about Korean bourse demanding listing requirements in revenue, profit and market capitalization standards stricter than the New York Stock Exchange (NYSE). Apart from financial statement requirements, the local bourse has guidelines on share allocation to ensure a company has 700 or more retail shareholders and audit report in order to go public.
But the strict regulations have bred irregularities of making companies cook up accounts in order to meet listing standards. As result, one out of five newcomers to the stock market reported operating loss in the second year on the market.
The stock exchange operator will come up with a new set of rules by March that would ease on entry and toughen on exit to allow more flexibility for newcomers and scrutiny to keep members worthy of investment.
By Moon Il-ho
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]