The Financial Services Commission held a meeting with the relevant government ministries and private sector entities on July 27 and unveiled a plan to improve the special listing procedures for technology companies. The plan includes 14 specific reform items from the stage of listing application to listing review to post-listing management.
First, in the listing application stage, a new “super gap tech listing track” will be created for high-tech and strategically critical technology companies, for instance in deep tech or deep science sectors. Among them, businesses that are market-tested for their growth potential will be allowed to have a tech assessment conducted only by a single entity. They need to be designated as national strategic technology companies or national advanced strategic technology companies as prescribed by the relevant laws, have market capitalization of KRW100 billion or more and have received investment of KRW10 billion or more in the past five years. In addition, a business eligible to apply for the “super gap tech listing track” will be allowed to seek a special tech listing track even when its largest investor is a middle market enterprise, considering wide adoption of open innovation business models based on collaboration between an SME and a middle market enterprise. However, the size of investment by a middle market enterprise will be limited to less than fifty percent to prevent potential problems regarding the ownership of the company. Also, the complex structure of the current special tech listing track will be made simpler and more reasonable. For instance, businesses with technological prowess will be able to apply through “innovative technology track,” while those with distinctive business models can apply through “business model track.”
Second, in the listing review stage, a fast-track review process will be granted to those that have been turned down previously for reasons other than their technology or business viability. In this case, they will be eligible to have a tech assessment conducted by a single entity and the review period will be shortened from 45 days previously to 30 days. In addition, participation by technology experts will be expanded in the stage of listing review and tech assessment.
Third, in the post-listing management stage, there will be procedural mechanisms to strengthen responsibility of bookrunners, which will help strengthen investor protections. If a newly listed tech company goes bankrupt within two years from the time of listing, the bookrunner that managed its listing process will be required to give put-back option to investors for six months and offer an extended lock-up period (from three month to six months) when it performs subsequent listing of other tech companies in the future. In addition, for each bookrunner, information about the number of successfully listed tech companies and their profitability will be put up for disclosure in KIND, Korea Exchange’s electronic disclosure system.
Speaking about the measures at the meeting, FSC Secretary General Lee Se-hoon said that the authorities plan to regularly monitor the implementation status and work to ensure that the special tech listing procedures can help propel the growth momentum for innovative companies and our economy and bring more opportunities for investors.
* Please refer to the attached file for details.