The Financial Services Commission on Tuesday unveiled plans to improve the corporate financing environment by easing the regulations on initial public offerings and devising ways for invigorating the moribund local capital market.
The regulator said as the first step toward easier IPOs, it will remove hurdles to stock listings and relax the rules on filing and disclosing corporate financial information to the extent that it does not hurt the interests of investors.
"In order to create a virtuous circle where listed companies can raise capital and cash out their investment, we will reorganize the KOSDAQ and KONEX," the FSC said in a statement.
KOSDAQ, the country's secondary bourse, will be transformed into a tech focused venture market based on loosened regulations, said the FSC.
Under the new screening regulations, a company with high-end technology and growth potential can be listed on the KOSDAQ with less strict requirements, the FSC said.
The venture-focused KONEX will play a role as a springboard for start-ups to become KOSDAQ-listed firms, it added.
When the economy was better, companies had raced to go public to raise capital and expand their businesses.
In recent years, however, the local IPO market has been waning due to the sluggish financial market coupled with stringent regulations aimed at improving investor protection.
The number of new offerings on the KOSPI has been in decline since 2011, with only three companies going public last year.
The KOSDAQ saw a 87 percent plunge in the total money raised through IPOs over the 2010-2013 period, with 40 companies seeking 1.4 trillion won ($1.35 billion) in 2013, compared to 98 firms raising 10.9 trillion won three years earlier.
Some local heavyweights, including Hyundai Oilbank and SK Lubricant, decided to postpone going public because of the market slump.
By Bae Hyun-jung and news reports (firstname.lastname@example.org)