'Establishment of Super-Gap Technology Special Cases'... Lowering the Threshold for Special Case Listings

Strengthening Underwriter Responsibility to Prevent Insolvency of Companies Listed via Technical Special Cases

The government will expand the special listing window for advanced technology companies in semiconductors, artificial intelligence (AI), secondary batteries, bio, and other fields. In this process, special listings will only be allowed for companies recognized for their growth potential in the market to prevent poorly performing companies from easily going public, and the responsibility of underwriters will be strengthened during special listings.

On the 27th, the Financial Services Commission held a joint public-private meeting chaired by Secretary General Lee Se-hoon and finalized the "Improvement Plan for the Technology Special Listing System," which includes these details. The main content is to allow single technology evaluations for companies among advanced and strategic technology firms that need national support and have verified growth potential in the market.

The target companies are those designated as national strategic technologies (50 items, designated by the Ministry of Science and ICT) under the "National Strategic Technology Promotion Act" and national advanced strategic technologies (17 items, designated by the Ministry of Trade, Industry and Energy) under the "National Advanced Strategic Industry Act," with a market capitalization of 100 billion KRW or more and investment attraction of 10 billion KRW or more in the past five years.

The technology special listing system was introduced in 2005 to support innovative companies' listing on KOSDAQ. While general companies must meet financial requirements to go public, technology special listings focus on qualitative requirements if there is a technology evaluation by multiple professional evaluation agencies or a growth evaluation by the listing sponsor (securities company).

Currently, single technology evaluations are allowed for materials, parts, and equipment (SoBuJang) companies, and the plan is to expand this to companies in advanced and strategic technology fields. A Financial Services Commission official explained, "While expanding the scope of single technology evaluations, we considered investor protection by targeting excellent companies that have been verified in the market."

The government decided that for companies with super-gap technologies eligible for special listing, even if a mid-sized company is the largest shareholder, they can apply for technology special listing. Currently, if a mid-sized company is the largest shareholder and holds 30% or more, technology special listing is not possible, but to prevent excellent companies from being excluded from the system for this reason alone, it will be allowed if the mid-sized company's shareholding ratio is less than 50%.

During the review stage, a friendly system will be operated to improve difficulties faced by companies pursuing special listings. If a company fails to list for reasons other than technology or business feasibility and reattempts listing within six months, the "fast-track review system" will be applied.

For these companies, technology evaluations will be conducted singly, and the review period will be shortened from the usual 45 days to 30 days. As cases continue where the preliminary review by the Korea Exchange passes but the IPO process is delayed due to correction reasons during the Financial Supervisory Service's securities registration statement review, the two agencies will also expand prior information sharing.

The Exchange will share analysis content reviewed during the preliminary review of technology special listing companies with the Financial Supervisory Service, and the Financial Supervisory Service will share specific details of correction requests with the Exchange. Additionally, to properly evaluate the advanced and strategic technologies held by companies, the Exchange's listing committee will be improved to include at least two technology experts among the nine members, and the national research institutions' evaluation indicators will add items such as "participation record in Exchange technology special listing evaluations" to encourage their involvement.

Along with this, the government has prepared institutional measures to strengthen the responsibility of underwriters during technology special listings to prevent poorly performing companies from easily going public through this system improvement.

If a technology special listing company becomes insolvent within two years after listing, the securities company that underwrote the listing will be subject to a six-month put-back option and the lock-up period for underwriting shares will be extended from three months to six months when underwriting future technology special listings. Information such as the number of technology special listings and profitability by underwriter will also be disclosed through the Exchange's electronic disclosure system (KIND).

Secretary General Lee Se-hoon emphasized, "In the current global tightening trend and economic slowdown, we have prepared measures jointly with the public and private sectors to maintain a virtuous cycle of venture capital investment. The system includes measures to strengthen the screening function to distinguish the 'wheat from the chaff' so that it can gain investors' trust and to enhance the responsibility of listing underwriters."

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