To list its stocks
on the Stock Market Division of KRX, a company must file a listing
application with the KRX. Based on the application,
the KRX reviews and determines the firms
eligibility for listing.
Listing
Requirements
Listing
requirements are regulated by the Act and
the Listing Regulation of the KRX, with regard
to the financial condition, size and profitability
of the issuer. The liquidity of the
securities, and other pertinent factors are
also considered to ensure fair price formation,
investor protection and smooth trading.
A company wishing to list on KSE must meet
all of the listing requirements of its specific
listing category.
The KRX has three categories for listing requirements:
， Option I for
large-sized companies. (see the first table
below)
， Option II for small and medium size companies.
(see the second table below)
， Listing requirements for foreign companies.
(see the third table below)
[Listing Requirements for KSE]
÷ Option 1:Listing for large
size companies
Criteria
Requirements
Operating
history
3
years or more
Paid-in
capital
5
billion won or more
Shareholders'
equity
10
billion won or more
Shares
to be listed
1
million shares or more
Minority
shareholders
1,000
or more
Financial
condition
No
capital impairment during the latest
fiscal year
Sales
Average
of 20 billion won or more for the latest
three fiscal years; and 30 billion won
or more for the latest fiscal year
Earnings
Operating
profit, ordinary profit and net profit
for the latest fiscal year must be posted;
also one of the following requirements
must be met:
Minimum ROE for the latest fiscal year
must be 5% and combined ROE for the
last three fiscal years must be 10%
or more.
Net profit for the latest fiscal year
must be at least 2.5 billion won and
combined net profit for the latest three
fiscal years must be at least 5 billion
won.
Debt-to-equity
ratio
Less
than 1.5 times the average debt-to-equity
ratio of the same industry. Special
soundness criteria is applied to financial
institutions.
Audit
opinion
Financial
statements for the last 3 fiscal years
audited by an external auditor must
receive:
Unqualified opinion for the latest fiscal
year, and
Unqualified or qualified opinion for
the other 2 fiscal years
÷
Option 2: Listing for small and medium-sized
companies
Criteria
Requirements
Operating
history
3
years or more
Paid-in
capital
3
billion won or more
Shareholders'
equity
7.5
billion won or more
Shares
to be listed
1
million shares or more
Minority
shareholders
1,000
or more
Financial
condition
No
capital impairment during the latest
fiscal year
Sales
Average
of 10 billion won or more for the latest
three fiscal years; 15 billion won or
more for the latest fiscal year, and
the growth of sales volume for the latest
fiscal year must be 20% or more over
the previous fiscal year.
Earnings
Operation profit, ordinary profit and
net profit for the latest fiscal year
should be posted.
And one of the following requirements
should be satisfied:
1) minimum ROE for the latest business
year must be 10%
2) net profit for the latest business
year must be at least 2 billion won
and cash flows from operating activities
must be positive.
Debt-to-equity
ratio
Less
then 1.5 times of the average debt-to-equity
ratio of the same industry. Special
soundness criteria is applied to financial
institutions.
Audit
opinion
Financial
statements for the last 3 fiscal years
audited by an external auditor must
receive:
Unqualified opinion for the latest fiscal
year, and
Unqualified or qualified opinion for
the other 2 fiscal years
[Listing
Requirements of Foreign Companies]
Criteria
Requirements
Operating
history
Shareholders'
equity
3
years or more
Shares
offered to public
10
billion won or more
Profit
300,000
shares/DRs or more
2.5 billion won or more for the latest
fiscal year; combined netprofit of 5
billion won or more for the latest three
fiscal years
Listing
Auditor's
opinion
Listed
company on its domiciliary exchange
Others
Unqualified
opinion for the latest 3 fiscal years
In addition to the listing requirements shown
in the tables above, a company is required
to meet the following requirements:
， In terms of
stock distribution, at least 30 percent of
total shares must be offered to the public
， 10 percent or more of the total shares must
be offered to the public after preliminary
listing review by KRX.
， The minimum number of shares to be offered
to minority shareholders depends on the size
of
the company's shareholder equity:
， 50 billion to 100 billion won : one million
shares or more
， less than 250 billion won : two million
shares
， 250 billion won or more : five million shares
， The number of shares held by the largest
shareholders must be less than 70 percent
of
the total outstanding shares.
A foreign corporation, after registering with
FSC, is allowed to list original stocks and
depositary receipts on KRX.
At the preliminary stage, the corporation
must appoint a listing agent based in Korea
to help consult on the listing eligibility
and procedures.
Listing requirements for Option I are equally
applied to both depository receipts (DR) and
underlying stocks.
Listing
procedures
Before applying
for listing on the KRX, it is suggested that
companies first take a few preparatory measures.
Companies attempting to list can save time
and effort by contacting the KRX prior to
application, discussing examination periods and
listing schedule. The listing procedures are
as follows:
1. Submission
of a preliminary application for listing eligibility
review
2. Notification
of the result of preliminary application:
The listing committee is supposed to notify
the applicant of the preliminary examination
results within 2 months of the application
date.
3. Book building and setting the price of
issuance: Issuing price of stocks will be
decided by the issuer and the lead manager
based on the results of the book building.
4. Subscription
and payment: The company will register its
new shareholders on the day after payment.
5. Reporting
the result of securities issuance to FSC
6. Issuance and
distribution of share certificate
7. Submitting
an application of new listing within a week after payment
date.
8. Approval of
listing and commencement of trading
Delisting
Stocks
Any company failing to meet listing requirements
will face designation as an
"administrative issue"
To promote asset quality in the stock market
and to protect investors, the KRX abolished
the grace period before delisting an administrative
issue. Now delisting is effective immediately after
any procedure failure.
[Delisting Procedure]
Criteria
Items
Administrative
Issue
Failure to file annual, semi-annual
or quarterly reports
Adverse or disclaimed CPA audit opinions
Suspension of business operations
Bankruptcy
Impaired capital ratio is 50% or more
Falling short of the minority shareholdership
requirement of 10% or more
Commencement of company reorganization
procedures
Failure to meet requirements for outside
directors and audit committee
Breach of disclosure obligations: twice
within two years
Average monthly trading volume below
1% of listed shares for six months
Delisting
Failure to file annual, semi-annual
or quarterly reports for 2 consecutive
years
Adverse or disclaimed CPA audit opinions
for 2 consecutive years
Failure to resolve reasons for suspension
of business operations within 1 year
Failure to resolve bankruptcy within
1 year
Impaired capital ratio is 100% or more
Falling short of the minority shareholdership
requirement of 10% or more of the floating
shares for 2 consecutive years
Failure to meet requirements for outside
directors and audit committees for 2
consecutive years
Violation of disclosure* rules again
within the following year after being
designated administrative issue
Failure to satisfy the average monthly
trading volume of 1% or more of listed
shares for one year
Sales amount of less than 5 billion
won for the latest fiscal year continues
for two consecutive years
* Note: With strengthened delisting
criteria under the revised KSE rules, listed
companies must disclose: (a) "qualified"
audit opinion received due to audit scope
limitation and (b) complete loss/erosion of
share capital. Previously, only "adverse"
and "disclaimer" opinions
needed to be disclosed.
Application
for Listing 
A company wishing to list on KSE must meet
all of the listing requirements of its specific
listing category.
