Private Sector, Government, and Presidential Office Join Forces on Delisting Insolvent Firms and Banning Dual Listings

President Lee Hosts Capital Market Normalization Roundtable with Investors
Discusses Measures to Improve Market Structure with Domestic Investors
Fund Injection by Growth Stage for Innovative Companies;
Revitalization of KONEX and KOSDAQ Markets
Expansion of Public-Oriented Investment Products

On March 18, President Lee Jaemyung will meet with domestic investors to discuss measures for capital market stabilization, normalization, and structural improvement. Amid significant corrections in the domestic stock market due to escalating tensions in the Middle East, this move signals the administration’s intention to not only address short-term volatility, but also to comprehensively review innovation tasks for the capital market during this crisis.

Yonhap News Agency

The Office of the President announced that on the afternoon of the same day, President Lee will preside over a “Capital Market Stabilization and Normalization Roundtable” at the presidential office. The event’s slogan is “A Resilient Capital Market That Earns Public Trust.”

A total of 47 participants will attend the roundtable, including representatives from the private sector, government, and the presidential office. On the private side, stakeholders such as executives from KOSDAQ- and KONEX-listed companies, startups, institutional investors, analysts, as well as individual investors including university students and young people, will be present. From the government and related agencies, participants will include Lee Eogwon, Chairman of the Financial Services Commission; Lee Chanjin, Governor of the Financial Supervisory Service; Hwang Sunho, Head of the Joint Response Team for Eradication of Stock Price Manipulation; and Jeong Eunbo, Chairman of Korea Exchange. Attendees from the presidential office will include Chief of Staff Kang Hoonshik, Policy Chief Kim Yongbeom, Senior Secretary for Economic Growth Ha Junkyung, Senior Secretary for Civil Affairs Bong Uk, and Deputy Secretary for Fiscal Planning Ryu Deokhyun.

During the event, Chairman Lee of the Financial Services Commission will announce structural improvement plans for capital market stabilization. In the short term, the government will focus on market stabilization in response to external shocks. In the mid-to-long term, the administration envisions a full-fledged restructuring of the capital market under four main policy directions: ▲trust, ▲shareholder protection, ▲innovation, and ▲improving market accessibility. The core initiatives under consideration include promoting the exit of insolvent companies from the market, fundamentally restricting dual listings through rigorous screening, and revitalizing KONEX and KOSDAQ markets to support stage-by-stage fundraising for innovative companies. Strategies to expand long-term investment and increase public-oriented investment products will also be discussed. Participants will then hold in-depth discussions on the government’s “Capital Market Structural Improvement Plan,” as well as topics such as ▲building a resilient market and diagnosing the stock market situation and response tasks, and ▲creating a market trusted by the public and tasks to achieve the Korea premium.

This meeting is a continuation of the government’s recent efforts to accelerate capital market normalization. In February, after the passage of the third amendment to the Commercial Act—which, in principle, requires retirement of treasury shares within one year of acquisition—President Lee emphasized the need for further institutional reforms, stating, “The capital market is also on the path to normalization.” Financial authorities are currently working on strengthening disclosures related to treasury stock ownership and disposal to enhance shareholder value, and improving disclosure requirements for shareholder meeting results, stock retirement, capital increases, and stock-based compensation in a more transparent manner.

Efforts to eradicate unfair trading practices are also ongoing. In January of this year, the Financial Services Commission, Financial Supervisory Service, and Korea Exchange expanded and reorganized the Joint Response Team to Eradicate Stock Price Manipulation. Since February, they have been operating a “Cyber Abnormal Trading Detection AI System” to swiftly detect suspicious trading activities on online bulletin boards, social media (SNS), and YouTube. These measures reflect the understanding that restoring market trust is essential to resolving the Korea discount.

Efforts are also underway to expand the supply of innovative capital and broaden the market base. The Financial Services Commission has implemented the Business Development Company (BDC) system, which requires investing at least 60% of assets in unlisted ventures, innovative companies, and KONEX and KOSDAQ-listed firms. Measures to ease over-the-counter trading regulations are also being pursued to enhance foreign investors’ access to the domestic stock market.

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