South Korea Excludes KONEX Market from Dual-Listing Regulations on July 6

According to the Financial Services Commission and Korea Exchange, on July 6, authorities released new guidelines for regulating subsidiary dual-listings, excluding the KONEX market from oversight. Parent companies listing subsidiaries on Korea's main KOSPI and KOSDAQ markets must now obtain shareholder approval through a specific process and comply with five mandatory duties, including impact assessments, shareholder protection measures, and independent committee reviews. The KONEX exclusion aims to support the underperforming market, where new listings dropped to just one company this year compared to 14 in 2022.

Market participants warn the exemption could create regulatory loopholes. Companies may exploit KONEX as an intermediate pathway to avoid stringent KOSDAQ listing requirements, potentially through later transfers to KOSDAQ or by establishing KONEX-based parent structures for direct KOSDAQ subsidiary placements, raising concerns about unequal treatment and regulatory arbitrage.