The Korea Alternate (KRX) has begun work on establishing duplicate itemizing tips. With ongoing market confusion over the idea, sorts, and permissibility of duplicate listings, the KRX goals to make clear requirements and improve predictability for market members. The important thing to the rules is predicted to be the definition of duplicate listings. Duplicate listings embody numerous sorts past the so-called “cut up listings,” the place enterprise divisions are spun off via bodily division after which listed.
In response to the funding banking (IB) business on Dec. 10, the KRX not too long ago launched preparatory work for establishing duplicate itemizing tips. It’s reported that the change is within the stage of figuring out the path of the rules by gathering business opinions from IPO personnel at main securities corporations. There’s a chance that the change will announce plans for guideline institution throughout the upcoming KOSDAQ revitalization coverage announcement, however it’s unlikely that detailed rules throughout the tips will probably be disclosed at the moment. The announcement of detailed rules is prone to happen someday subsequent yr.
The important thing to the rules is predicted to be the definition of duplicate listings. Duplicate listings embody numerous sorts: circumstances the place mum or dad corporations spin off or cut up off enterprise divisions into separate authorized entities for itemizing, circumstances the place new authorized entities are established for itemizing, and circumstances the place different authorized entities are acquired after which listed. There are variations in traits between circumstances the place the mum or dad firm is an working firm versus a holding firm, and operational and managerial independence, shareholder safety measures, and the proportion of subsidiaries within the mum or dad firm’s consolidated efficiency additionally differ. The “cut up listings” that President Lee Jae Myung has criticized since his presidential marketing campaign refers to circumstances the place core enterprise divisions are cut up and listed redundantly on the inventory market, and whether or not different circumstances will probably be thought of as broad duplicate listings stays a variable.
As soon as the rule institution is accomplished as scheduled, market confusion surrounding duplicate listings is predicted to be partially resolved. The change partially discloses duplicate itemizing assessment requirements within the yearly revealed “Itemizing Evaluation Pointers,” and plans to make associated content material extra particular via this work. This yr, there was market confusion associated to duplicate listings, with SK Innovation abandoning its plan to listing subsidiary SK Enmove halfway via the method, and the failed itemizing of Genoscco, a subsidiary of KOSDAQ-listed Oscotec. When the change’s assessment requirements turn into extra particular and instantly communicated, the IB business will have the ability to conduct preliminary preparation work extra totally.
Over the previous 10 years, roughly 20 giant company associates have been listed redundantly on the KOSPI market, with 9 corporations (LG CNS, HD Hyundai Marine Resolution, EcoPro Supplies, LG Power Resolution, Kakao Pay, Kakao Financial institution, SK IE Expertise, SK Bioscience) newly coming into the inventory market since 2020. When the scope is expanded to incorporate KOSDAQ, the variety of duplicate itemizing associates will increase additional. Giant company subsidiaries corresponding to HD Hyundai Robotics, Hanwha Power, and SK Ecoplant are at present making ready for IPOs. Amongst these, SK Ecoplant is prone to file for preliminary itemizing assessment within the first half of subsequent yr, making it extremely possible to be topic to the newly established duplicate itemizing tips.
