Following a court decision that halted delistings based on stricter market capitalization requirements, the Korea Exchange (KRX) has decided to temporarily suspend subsequent delisting procedures for stocks designated as administrative issues for the same reason.

In a press release issued today (October 7), the KRX stated, "The Exchange plans to explain its position during the objection process regarding the court's injunction and the lawsuits filed."

The Exchange explained, "Considering the intent of the court's decision, the designation of administrative issues due to falling short of the market capitalization threshold, which took effect on July 1, 2026, will be maintained as is. However, considering the possibility of increased uncertainty for companies and investors due to the spread of similar disputes, subsequent delisting procedures following the designation of administrative issues have not been pursued since October 2, and we plan to suspend them moving forward."

As of this afternoon, the number of listed companies designated as administrative issues due to insufficient market capitalization (excluding trading-suspended stocks) stands at 19 on the KOSPI and 40 on the KOSDAQ.

These listed companies will maintain their designation as administrative issues until follow-up measures are taken, but they will not progress to the next stages, such as trading suspensions.

This means trading will continue uninterrupted in the market.

However, the Exchange added, "For corporations whose delisting due to insufficient market capitalization was decided before October 2, 2026, and whose trading is currently suspended, we plan to maintain the trading suspension."

These corporations include a total of 8 companies: 2 KOSPI-listed firms, JooYeon Tech and SHD, and 6 KOSDAQ-listed firms, ShillaSG, Gold & S, KM Healthcare, Fintel, Sejin TS, and AFW.

Previously on October 2, the 51st Civil Division of the Seoul Southern District Court granted injunction requests filed by JooYeon Tech and KM Healthcare against the Korea Exchange to suspend the effect of their delisting decisions.

The court reportedly pointed out issues with clauses such as the one stipulating that a company designated as an administrative issue for failing to meet the market capitalization threshold will be delisted if it fails to exceed the market capitalization baseline for 45 consecutive trading days out of 90 trading days.

In particular, the court judged that the measure to accelerate the implementation schedule for raising the market cap threshold—which was originally scheduled to take effect in January next year—to July of this year undermined the principle of proportionality and predictability.

The KRX interpreted this by stating, "The court's stance is that 'it is difficult to easily conclude that the purpose of the market cap threshold itself is unjust, the means inappropriate, or the criteria amount excessive.' Instead, the court mainly pointed out issues regarding the guarantee of the right of listed companies to participate in procedures such as filing objections, as well as the early implementation timing."

Due to the court's decision to grant the injunction, the effect of the delisting decisions for JooYeon Tech and KM Healthcare has been suspended until the final ruling on the merits, and liquidation trading procedures will also not take place.

In response, the KRX halted trading as of October 2 for AFW and Sejin TS, whose liquidation trading had been underway since September 23 and September 29, respectively, following delisting decisions for the same reason, thereby withholding procedures related to their delisting.

Meanwhile, the number of stocks designated as administrative issues going forward is expected to continue to rise.

Under the tightened regulations implemented in July of this year, KOSPI-listed firms falling below a market cap of 30 billion won and KOSDAQ-listed firms falling below 20 billion won for 30 consecutive trading days are designated as administrative issues, and there are no issues with the application of this regulation.

The Exchange explained, "The court dismissed the request to suspend the effect of the administrative issue designation decision, and only granted the request to suspend the effect of the delisting decision."

The delisting regulations for penny stocks with share prices below 1,000 won, which were implemented in July of this year alongside the raising of market capitalization thresholds, are set to remain in effect as they are.

As of today, the number of listed companies designated as administrative issues due to penny stock status stands at 6 on the KOSPI and 32 on the KOSDAQ.

Accordingly, listed companies designated as administrative issues due to share price shortfalls as well as market cap shortfalls are expected to proceed with regular delisting procedures.

(Photo: Yonhap News)