[Source: Korea Exchange]
The Korea Exchange (KRX) will remove the minimum 30 million won ($25,000) deposit requirement for investment in companies listed on the Konex index and lower other regulatory barriers to reinvigorate the country’s third-tier bourse for startups.
KRX announced Sunday it will abolish the requirement for Konex investors to deposit at least 30 million won and maintain an investment account with an annual balance of up to 30 million won, which have been considered obstacles to investment in Konex members. Instead, it will provide investors enhanced warning notifications for the risk of investment in Konex-listed companies.
The Konex first opened in 2013 to facilitate easier fundraising for small and medium sized companies and their gradual move up to bigger markets. The number of companies listed on the Konex, however, has declined from 154 in 2017 to 131 in 2021 due to its strict listing requirements. Also, big shot startups directly head to the Kosdaq, while investors prefer over-the-counter trade in unlisted companies.
The KRX said it will make it easier for the Konex-listed companies to transfer to the Kosdaq market. The stock market operator will relax financial requirements for the move and allow exemptions for actively traded stocks. Discounts are to be made on regulatory filing fees and other cost related to index transferring.
The KRX will also expand support for companies listed on the Konex. It plans to create a fund, sized up to 100 billion won, to attract more institutional investors to the minority market. Consulting and other supports will be offered to Konex-listed companies moving to Kosdaq.
Korea’s sole stock bourse operator said it will apply changes that require only revising internal rules within the first quarter and those that need agreement from securities companies by June this year.
By Lee Jong-hwa and Cho Jeehyun
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