“While we agree with the financial authorities on the need to improve the capital market, a one-size-fits-all regulatory approach could lead to extreme polarization in the KOSDAQ market,” said Song Byeong-jun, Chairman of the Venture Business Association. The venture and startup sectors have raised alarms about the capital market reform proposal being pursued by financial authorities. They warned that if the government continues its regulatory-heavy policies, a “brutal delisting process” could emerge, pushing innovative growth companies out of the market. On June 15, the Venture Business Association, the Korea Venture Capital Association, and the Korea Startup Forum held a joint press conference in Yeouido, Seoul, under the theme “Reviving the Heart of the Innovative Economy through Capital Markets.” During the conference, industry representatives expressed their deep concerns regarding the recent strengthening of delisting criteria and the potential impacts of the capital market reform. They officially proposed five key policy tasks to the financial authorities, which include: a postponement and review of the KOSDAQ segment implementation, exceptions to the ban on dual listings, a delay and reassessment of delisting criteria, the establishment of a permanent policy consultative body, and enhancements to the technology-based listing system. Chairman Song highlighted the ongoing “deepening polarization” and “ranking” within the KOSDAQ market, pointing to the government’s plan to divide the market into “premium” and “standard” segments as a prime example. He stated, “The venture and startup sectors fear that companies classified under the standard segment will be unfairly labeled as ‘subpar companies.’” He added, “The ‘KOSDAQ 3000 era’ proposed by the government last year still feels distant in the field. Instead of building higher walls of regulation, we need to normalize the KOSDAQ market so that everyone can grow.” Kim Hak-kyun, Chairman of the Korea Venture Capital Association, also emphasized that “the key to a healthy venture investment ecosystem is the smooth circulation of funds,” warning that if venture capital fails to recover and reinvest in a timely manner, the entire ecosystem could collapse. Regarding the financial authorities' push for stricter delisting criteria, industry leaders called for a more specific postponement and reassessment of the standards. While they agree with the intention to eliminate underperforming companies to restore market confidence, they argue that the upcoming “delisting criteria for companies with a market capitalization below 30 billion won” scheduled for January 1, 2027, should be fully postponed and reviewed. As of late April 2026, 79.5% of KOSDAQ-listed companies (1,603 in total) have venture backgrounds, accounting for 81.1% of the total market capitalization. Notably, the proportion of venture companies among those listed under the technology-based listing system is nearly 89.8%. With such a structure, applying immediate delisting criteria based solely on quantitative indicators like market capitalization, stock prices, and capital erosion could unjustly target promising companies with future potential. Companies nearing these thresholds are already being stigmatized as “delisting risk companies,” leading to further stock price declines and a vicious cycle of funding shortages. Kim Jae-won, Chairman of the Korea Startup Forum, remarked, “If the focus remains solely on delisting and regulation, innovative startups in desperate need of funding will be stifled. We must clearly differentiate between the split listings of large corporations and the subsidiary listings of startups.”
* This article has been translated by AI.
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