Maekyung Media Group holds the 2019 Maekyung Capital Market Discussion on Thursday in Seoul to explore ways to stimulate the stock market. [Photo by Kim Jae-hoon]
Bio startups will find it easier to apply to go public under a new set of IPO guidelines to be announced by top financial authority Financial Services Commission (FSC) next month.
FSC Chairman Choi Jong-ku said during the 2019 Maekyung Capital Market Discussion on Thursday that the financial authority will overhaul listing and fund-raising rules to make it easier for companies with high potential to join the market, with an aim to enhance Korean stock market’s competitiveness.
It plans to apply different listing rules to different companies to give greater chance to firms with high growth potential to go public. The first industry that will benefit from the revised rule will be bio firms. The authority will also allow promising firms to join the market without receiving audit inspection during an initial public offering (IPO) process, if the company’s lead advisor vouches for it.
FSC Chairman Choi Jong-ku. [Photo by Kim Jae-hoon]
The new rule is expected to significantly shorten IPO preparation period because the financial authority’s audit inspection usually takes about three to six months. But large companies having more than 1 trillion won ($844.6 million) in assets still need to go through the inspection.
The FSC has so far made various efforts to lower the entry barriers by adopting the so-called Tesla standards that allow listing of promising firms that have not yet generated significant profits and softening rules for technology companies, but still there are too many regulations that get in the way, according to an official from the FSC.
Meanwhile, Choi Woon-yeol of the ruling Democratic Party said in his keynote speech at the discussion that the government needs to ease financing rules for non-listed firms and make it easier for small- and mid-sized companies to raise fund in the capital market. He also argued that the government should upgrade taxation schemes and adopt fund-type retirement pension to stimulate the capital market.
By Chung Seng-hwan and Choi Mira
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