The government has settled on a plan to allow only 70 companies into the premium tier, the core of its push to reform KOSDAQ into a "tiered segment system (premium, standard, and watch groups)" aimed at revitalizing the market. The intent is to tighten the concentration of blue-chip firms to secure KOSDAQ's representativeness, similar to the Nasdaq 100, thereby strengthening the inflow of passive capital from pension funds and others. However, if the middle and lower tiers turn out to be broader than expected, concerns that companies could be classified as non-blue-chip make a backlash from the venture industry — over ranking pressure and stigma effects — likely unavoidable.
According to the financial investment industry on Thursday, the Korea Exchange (KRX) is carrying out this KOSDAQ tiered segment reform with the goal of revising listing and disclosure regulations in the second half of the year. An advisory group composed of experts from brokerages, venture capital firms, and academia held a kickoff meeting to gather stakeholder input. Unlike the KOSPI, which nearly doubled in less than half a year to approach the 9,000 mark, KOSDAQ has returned to early-year levels and barely surpassed the 1,000 line, making structural improvement an urgent task.
The tiered segment system centers on dividing the KOSDAQ market into premium, standard, and watch groups based on market capitalization, earnings, and governance, with differentiated entry and maintenance requirements and disclosure systems for each tier. The Financial Services Commission (FSC) had initially proposed a plan to include 80 to 170 companies in the top premium tier. As of March 18, when the capital market structural improvement measures were announced, the number of KOSDAQ-listed companies stood at 1,806, and the plan was to operate the top tier with about 4 to 10 percent of the total. However, the judgment that placing too many companies in the premium tier would dilute the purpose of the reform is said to have come into play. In response, the remaining KOSDAQ companies have expressed concerns that they will be stigmatized as non-blue-chip.
