From July, Penny Stocks to Face Delisting... Market Cap Thresholds Also Raised

by Lim Chunhan

Published 17 Apr.2026 10:58(KST)

The Korea Exchange announced on the 17th that it will be pre-announcing amendments to the listing regulations for the KOSPI and KOSDAQ markets to expedite the delisting of insolvent companies.

Korea Exchange

The main changes include raising the market capitalization threshold, establishing a "penny stock" criterion, introducing a semiannual capital impairment requirement, and strengthening the penalty point standards for disclosure violations.

For the market capitalization requirement, starting July this year, the threshold will be raised to KRW 30 billion for KOSPI and KRW 20 billion for KOSDAQ. From January next year, it will be further raised to KRW 50 billion for KOSPI and KRW 30 billion for KOSDAQ. This advancement is six months and one year earlier, respectively, than previously announced. If a company falls below the standard for 30 consecutive days, it will be designated as an issue under management. If it fails to exceed the threshold for 45 consecutive days within 90 days thereafter, it will be delisted.

Under the penny stock criterion, if the closing price remains below KRW 1,000 for a certain period, the company will be designated as an issue under management. If the situation is not resolved, it will become grounds for formal delisting. Complete capital impairment over a half-year period will also be added as a substantive delisting review criterion. For disclosure violations, the penalty point threshold for substantive review will be strengthened from the current 15 points to 10 points, and a separate provision will be established to immediately trigger a substantive review for major disclosure obligations violations committed intentionally.

This announcement reflects revisions and supplements to the penny stock circumvention provision, based on stakeholder feedback collected during the first regulatory notice period. Previously, post-stock consolidation prices below par value were grounds for delisting, but this could not be applied to no-par stocks and failed to prevent circumvention through capital reduction. As a result, the rules have been improved to restrict repeated and excessive stock consolidations or capital reductions aimed at evading penny stock status.

If a corporation that completed stock consolidation or capital reduction within one year prior to the designation as a penny stock issue under management attempts another consolidation or capital reduction within 90 trading days after designation, it will be prohibited. Additionally, the total ratio of consolidation or capital reduction within 90 trading days of designation as an issue under management cannot exceed 10-to-1.

The Korea Exchange stated, "The revised draft of the listing regulations will be re-announced on our website for seven days," adding, "We plan to finalize the amendments next month after approval from the Financial Services Commission."