[Last updated: 1 January 2024, unless otherwise noted]
Domestic Company Listing
A domestic company applying for a primary listing must apply for a preliminary listing review, followed by a new listing review, after the subscription procedure in order to be assessed on whether it meets the listing requirements (both quantitative and qualitative requirements) set forth in the Listing Regulations. When applying for the listing reviews, it must file an application package that will include:
Documentation for Preliminary Listing Review
- Application form for the preliminary listing evaluation.
- Financial Documents comprising:
- Individual/Consolidated Financial Statement and Audit Report for the last three fiscal years.
- Individual/Consolidated Financial Statement for the year of the preliminary listing review and the Audit Report (in the case where 6 months and 45 days of the year have passed at the point of submission of listing documents).
The Financial Statement and the Audit Report must be drafted in accordance with K-IFRS (Korean version of International Financial Reporting Standards).
- Corporate Registry.
- Articles of Incorporation.
- e) Shareholder's Registry as at the end of the recent fiscal year.
- Stock Transfer Agency Agreement.
- (If a paper company is the largest shareholder) Report confirming that the company is a paper company.
- A certificate/agreement containing covenants that the shareholders of the company will retain shares for the mandatory share retention period following the IPO.
If the company is applying for listing on the KOSDAQ Market, the following documents will also need to be submitted as part of the application package for the preliminary listing review:
- Certificate of Issuance / Registration of Shares.
- Minutes of Board of Directors resolving to list the company on the KOSDAQ Market.
- Documents prescribed by the KRX in relation to internal control checks conducted by the listing agent.
- Opinion of the Bank.
- Letter showing the investment status of related stakeholders.
- Certificate of completion of the Exchange's listing application education program.
- Business Report of the recent fiscal year (in the case of a company listing with necessary share distribution requirements).
Documentation for New Listing Review
- Application form for the new listing review.
- Documents submitted for the Preliminary Listing Review.
- Certificate of Issuance / Registration of Shares.
- Documentation verifying that the payment for the subscription of shares is complete.
- Shareholder's Registry or Summary of Subscription / Allotment made for the newly issued shares.
- Copy of Report verifying the issuance of shares.
- Documentation verifying share distribution.
- Stock Transfer Agency Agreement.
If the company is applying for listing on the KOSDAQ Market, the following documents will also need to be submitted as part of the application package for the new listing review:
- A certificate/agreement containing covenants that the shareholders of the company will retain shares for the mandatory share retention period following the IPO.
- Letter issued by the Depository to prove mandatory retention of shares by the holder.
- A document verifying that there was a company presentation for investors.
Foreign Company Listing
In Korea, documentation required for the preliminary listing review differs based on whether a company is domestic or foreign. A foreign company applying for a primary listing must seek application for a preliminary listing review followed by a new listing review after the subscription procedure to be assessed on whether it meets the listing requirements (both quantitative and qualitative requirements) set forth in the Listing Regulations. When applying for the listing reviews, it must file an application package that will include:
Documentation for Preliminary Listing Review
- Application form for the preliminary listing evaluation.
- Financial Documents comprising:
- Individual/Consolidated Financial Statement and Audit Reports for the last three fiscal years.
- Individual/Consolidated Financial Statement for the year of the preliminary listing review and the auditor's report (in the case where 6 months and 45 days of the year have passed at the point of submission of listing documents).
The Financial Statement and the Audit Report must be drafted in accordance with K-IFRS (Korean version of International Financial Reporting Standards). In the case of foreign companies, the audit of the financial statements may be made in accordance with K-IFRS, US-GAAP, or IFRS standards.
- Report on Internal Accounting Management Procedures.
- Articles of Incorporation (including all mandatory requisite articles as stipulated in the KCC).
- Minutes of the Shareholder's Meeting / Board of Directors Meeting resolving that the company is to issue and list shares in a foreign exchange.
- Incorporation Documents of the foreign company.
- Agreement/Document verifying the appointment of a listing sponsor.
- A letter by a legal attorney certifying that the contents of the listing application are true and correct.
- Shareholder's Registry as at the end of the most recent fiscal year.
- An agreement with a stock transfer agency on how to exercise the shareholder's rights.
- Auditor's Confirmation Letter.
If the foreign company is applying for listing on the KOSDAQ Market, the following documents will also need to be submitted as part of the application package for the preliminary listing review:
- A certificate/agreement containing covenants that the shareholders of the company will retain shares for the mandatory share retention period following the IPO.
- Certificate of Issuance / Registration of Shares.
- Documents prescribed by the KRX in relation to internal control checks conducted by the listing agent.
Documentation for New Listing Review
The documentation required for new listing review for a foreign company is identical to that of the domestic company except that (i) a certificate of ownership of foreign shares and (ii) documents that can verify the market price of the share on a foreign exchange (in the case of secondary listings) must also be submitted.
Secondary listings. Where the listing applicant's securities are already traded on another exchange, subject to very minor differences, the Listing Regulations' requirements and required documentation are very similar to that of a primary listing. In the case of secondary listings, the company application package will have to include documentation verifying that the company is currently listed on a foreign exchange, with share distribution information for the past year.
Securities Report. Once the company receives approval following the preliminary listing review, the company must submit a securities report to the Financial Services Commission for review. A securities report is a document that discloses the details of the securities being offered or sold and the issuer of the securities. It is in a specific format and forms the basis for the right to subscribe for shares. The contents of the securities report must include the following:
- Regarding Securities Offerings or Sales
- General Information on the securities being offered.
- Rights of the securities / Risk factors.
- Assessment of the securities by an analysis institution (Expert Report).
- The purpose of the funds collected (intended use of proceeds).
- Other details required for the protection of the investors.
- Regarding the Company
- Overview of the company and its business.
- Financial information.
- Expert report by an auditor.
- Information on the Board of Directors and organizations within the company.
- Information on shareholders / employees / directors of the company.
- Information on affiliate companies or subsidiaries.
- Dealings with stakeholders.
- Other details required for the protection of the investors.
Prospectus. The prospectus is an investment document required to be provided to the public when soliciting the subscription of securities. It is prepared and circulated once the details of the terms of the offering and sales of the securities are finalized, after the review of the securities report. The prospectus must include all of the information included in the securities report (see above) and must not include information materially different from that in the securities report. It should also include information on the effective date of the securities report filing and the finalized public offering price. The prospectus must be kept in the issuing company's main office, branch offices, the Financial Services Commission, the KRX, and any office used for the solicitation of securities for the public to read and review.
The documentation requirements described in this section are similar for both KOSPI and KOSDAQ companies, with a few minor deviations. The following is a fairly typical process and timetable for the listing of a company on the KRX.
Typical process and timetable for Listing
The length of time required for the preparatory stages of a listing, before the application for the preliminary listing review, varies from company to company. After the preparation for the application is complete, the company applies for a preliminary listing review by the Listing Disclosure Committee, in which the company is evaluated on whether it meets the listing requirements (both quantitative and qualitative requirements).
If the issuing company receives approval from the Listing Disclosure Committee following the preliminary listing review, it must next submit a securities report to the Financial Services Commission that discloses the details of the securities being offered or sold and the issuer of the securities. This report is in a prescribed format and forms the basis for the right to subscribe for shares. Once the securities report is reviewed and approved by the Financial Services Commission, a prospectus is prepared and made available to be read by the public at the offices of the issuing company as well as at the Financial Services Commission, as well as at any office that solicits subscription for the shares.
The issuing company then decides upon a desired public offering price and holds investor relations' events to present information on the public offering. Once demand forecasting for the shares is complete and the public offering price is finalized, the issuing company will receive subscriptions, allot the shares and receive payment for the shares. Once the public offering is complete, the issuing company will file an official application for the listing. The KRX will review certain requirements (such as the share distribution requirement) that were not evaluated in the preliminary listing review and re-evaluate whether the requisite reporting requirements are still met at the date of listing. If the listing is reviewed and approved, the issuing company may commence public dealing in the shares.
The preparatory stage before applying for a preliminary listing review typically takes six months to a year and it typically takes approximately four months from application for the preliminary listing review to the point of initial public offering. The KRX is required to notify the company of the result of the preliminary listing review within 45 days of the application in the case of domestic companies or secondary listing of foreign companies, and within 65 days of the application in case of primary listing of foreign companies. In the case of blue-chip companies that meet certain threshold requirements on size and management, certain qualitative requirements may be waived and may be reviewed within 20 days as part of a "fast-track" evaluation system.
The following diagram summarizes the process for a listing application.
Note: "D-day" stands for the provisional date when the company applies for the preliminary listing review after it has finished preparatory stages for listing.
The following is a fairly typical timetable for a listing of a company on the KRX.