[Asia Exclusive] "Creating a Strong Capital Market to Support Innovative Growth"

Son Byung-doo, Chairman of the Korea Exchange, is being interviewed on the 8th at the Korea Exchange in Yeouido, Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Song Hwajeong] Sohn Byung-doo, Chairman of the Korea Exchange (KRX), announced the core strategic directions for the exchange under the theme "A Strong Capital Market Supporting South Korea's Innovative Growth" on the 100th day of his inauguration on the 31st of last month. Chairman Sohn presented the "5 Core Strategies and 20 Implementation Tasks" as a strategy to drive the continuous innovative growth of the capital market in response to the rapid changes in the financial environment caused by the prolonged COVID-19 pandemic, the era of the new normal, and digital technological innovation.

This core strategy includes responses to recent market issues such as the overseas listing of unicorn companies and ESG (Environmental, Social, and Governance) growth, demonstrating a swift adaptation to market trends by proposing strategies aligned with current market issues.

First, the exchange plans to enhance the attractiveness of domestic listings for unicorn companies by improving the KOSPI listing system and specializing the review process. A new standalone requirement of a KOSPI market capitalization of 1 trillion KRW has been introduced, and the market capitalization and equity capital requirements have been relaxed from the previous 600 billion KRW and 200 billion KRW to 500 billion KRW and 150 billion KRW, respectively. Additionally, the listing system and qualitative review process will be improved to reflect the characteristics of unicorn companies and next-generation growth companies such as battery, bio, internet, and game (BBIG) sectors, including the participation of technology evaluation experts in the review process. Accordingly, starting from the 26th, the exchange will ease the technology special case recognition procedures for unicorn companies with excellent market capitalization. Previously, to obtain technology special case recognition, companies had to receive technology evaluations from multiple specialized agencies before filing a preliminary listing review. Under the new simplified measure, companies with a market capitalization of 500 billion KRW or more can be evaluated by a single agency. Companies with a market capitalization of 1 trillion KRW or more can skip the preliminary evaluation process and undergo review through an external expert meeting after filing the preliminary listing review.

To expand the capital market's role in leading industrial paradigm shifts such as ESG, the exchange plans to continuously develop and supply ESG-themed Exchange-Traded Funds (ETFs) and Exchange-Traded Notes (ETNs) supporting the Korean New Deal policy. It will launch a set of three climate change indices including the KRX300 Climate Change Index, KOSPI200 Climate Change Index, and Climate Change Leaders Index, and plans to facilitate fast-track listings of ESG investment products and establish a comprehensive ESG segment information portal.

The exchange will also actively work to establish a fair market order to create a trustworthy investment environment. In particular, with short selling resuming next month, the exchange will thoroughly manage the market to ensure smooth implementation and operation of short selling system improvements and management systems, and will significantly strengthen market surveillance and post-management to block illegal and unfair trading without any gaps.

To secure global competitive advantage, the exchange plans to accelerate the construction of a next-generation market system that upgrades the IT infrastructure, a core competitiveness of the capital market, to the world's highest level. The next-generation market system is targeted to be operational by 2023. The exchange also plans to gradually reduce the tick size of stock market bids, which is currently higher than overseas markets, to enhance price discovery functions and reduce trading costs.

Chairman Sohn stated, "As a market operator, the Korea Exchange's fundamental roles and responsibilities are more important than ever," adding, "We will listen to voices from the field through communication channels with various market participants, closely cooperate with the government, and carry out projects systematically and deliver results with speed."

This content was produced with the assistance of AI translation services.