KRX to get another restructuring

The government announced Thursday it will restructure the Korea Exchange (KRX), the nation’s sole securities exchange operator, by turning it into a holding company and separating the benchmark Kospi market from the secondary Kosdaq.

The restructuring is part of efforts to boost the competitiveness of the nation’s capital market and attract innovative start-ups and small and midsize enterprises with promising skills to the secondary Kosdaq, the Financial Services Commission (FSC) said.

The new bourse operator system will govern the Kospi, Kosdaq and derivatives market as its subsidiaries, as well as launching a non-profit, independent firm in charge of settlements, according to the top financial regulator.

Through revising the Capital Markets Act, the new KRX will file for an initial public offering, the FSC said.

“Currently, thousands of companies in the country already fulfill the conditions to be listed on the stock market, but only about 40 of them have been listed annually,” FSC Chairman Yim Jong-yong said at a briefing on Thursday. “While several operators worldwide are trying to offer better services for investors ... the Korea Exchange is lagging behind the global trend.

“One illustrative example is Nexon, one of our country’s successful game developers, which is listed on the Japanese market but not on our own,” he said. “In this situation, the government has decided to come up with ways to boost the competitiveness of the exchange operator.”

Yim also pledged to ease regulations in order to list more promising Korean companies on the Kosdaq market, as he believes the secondary market has now settled in.

Established in 1956, the nation’s sole stock exchange operator has been criticized for its de facto monopoly in stock exchange and inefficiency in management, as well as excessive benefits for its employees.

In 2005, the government merged the Kospi, Kosdaq and futures markets into the KRX and turned the operator into an incorporated. In 2009, however, the government again restricted the operator by designating it as a state-run organization, citing its dominance in the market.

In January 2015, the operator was again reclassified as a private company after the operator’s chairman cut costs in labor and management and improved managerial efficiency.

Currently, about 80 percent of Korea Exchange shares are held by local securities companies and other organizations.

BY KIM HEE-JIN [kim.heejin@joongang.co.kr]