South Korea on Tuesday opened a new exchange platform for venture capitals, private equity funds, and other institutional players to vitalize their investment in unlisted companies.

The new platform would be annexed to the Korea Over-the-Counter (K-OTC) market, where investors are mostly individuals. The new exchange has less strict entry guidelines so that any unlisted startups and small- and mid-sized can trade and draw easier funding from institutional players, said its operator Korea Financial Investment Association.

Apart from easier membership guidelines, private equity funds can also be traded on the exchange. Members are not mandated to regular disclosures. Investors will be able to redeem their investment at earlier stage.

The OTC market current has just 138 stocks, drawing just 6 percent of total unlisted small and mid-sized companies in unregistered over-the-trading market. Daily transaction value last year averaged at 650 million won ($581,400).

By Jin Young-tae and Cho Jeehyun

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