[DigitalToday reporter Sangyeop Oh] The Korea Exchange will significantly strengthen its listing eligibility substantive review system to speed the removal of marginal companies listed on Kosdaq. The maximum improvement period will be shortened to 1 year, and full capital impairment on a mid-year basis will be included as a review trigger.

On the 19th, the Korea Exchange announced a "plan to 추진 fast-track removal of troubled companies" with these measures. The steps follow the Financial Services Commission's "delisting reform measures" announced on the 12th and were prepared to restore investor confidence and improve market soundness.

The exchange will first reorganise its substantive review function to speed reviews.

On the 9th, it set up a Planning Review Team within the department in charge of delistings. If multiple companies with the same controlling shareholder become subject to review, the team will integrate them into a single, bundled review system. The exchange said it aims to prevent review delays and carry out a more efficient removal process.

The improvement period given to troubled companies will also be sharply reduced. The improvement period, previously granted for up to 1 year and 6 months, will be shortened to 1 year.

It also decided it will determine early removal even before the period ends if a company fails to carry out its improvement plan during the improvement period or is judged to have lost business continuity or the ability to remain in existence. Even when granting an improvement period, it plans to strictly verify the feasibility of the plan to block a simple extension of a firm's lifespan.

The criteria for selecting targets for substantive review will also be tightened. Previously, only full capital impairment on a full-year basis was subject to review, but full capital impairment on a mid-year basis will be added as a reason for substantive review.

The requirement for designation as an unfaithful disclosure company will be lowered to "10 points" from "15 points or more in annual cumulative penalty points", and the company will immediately become subject to review if serious or intentional violations occur.

The exchange will designate the period through June 2027 as an "intensive delisting management period" and operate an "intensive delisting management team" headed by the head of the Kosdaq Market Division. The team will oversee the progress of delistings and gather opinions on improvements to related systems.

An exchange official said, "We will concentrate our capabilities so the Kosdaq market can establish itself as a market trusted by investors through the establishment of a strict and rapid system for removing troubled companies."

Last year, 23 companies were delisted from the Kosdaq market through substantive review, the highest number since 2010, and the average time required was shortened to 384 days.