Min Kyung-wook, Korea Exchange KOSDAQ division head, announced a 3-tier market restructure within this year. The plan divides 1,800 listings into Select, Standard, and Alert segments. Alteogen, the market cap leader, will remain on KOSDAQ instead of transferring to KOSPI. Min attributed the reform to 30 years of trust erosion from poor-quality listings driving investor flight. The Select tier will attract institutional funds, with derivatives and ETFs launching together—addressing the 2022 Global Segment's failure to provide hedging tools.
KRX Plans Simultaneous Launch of Derivatives and ETFs for Select Tier
Korea Exchange is eliminating the current affiliation system and restructuring KOSDAQ into Select, Standard, and Alert tiers. Min stated the Select tier will curate quality companies to attract institutional and foreign capital, with funds then flowing to Standard-tier firms through active ETFs and segment-linked products. He acknowledged the 2022 KOSDAQ Global Segment failure, citing two causes: the "Global" name lacked clarity, and index futures launched 1.5 years after the index debut. Min said derivatives, ETFs, and indices will launch simultaneously this time to enable institutional hedging.
KRX is backtesting Select tier criteria with an advisory group comprising VCs, asset managers, pension funds, and academics. Min said the criteria will balance growth potential and stability, excluding high-market-cap companies without earnings while including deep-tech firms with limited current revenue but strong future prospects.
Alteogen Retention Signals Positive Market Shift
Alteogen, which went public through a technology-based listing in 2013 and grew its market cap 100-fold, announced it will remain on KOSDAQ instead of transferring to KOSPI. Min called the decision "very welcome" and interpreted it as a positive market signal regarding the segment reform and government activation policies including the National Growth Fund.
KRX data shows 11 of 16 companies that transferred to KOSPI in the last 10 years saw market cap decline by year-end in their transfer year. Min stated larger markets do not guarantee higher valuations. He said Alteogen's decision sends a message to AI unicorns like Rebellions and FuriosaAI considering KOSPI or NASDAQ listings. Min is meeting AI unicorn CEOs directly, emphasizing that KOSDAQ listing offers sector leadership status and premium valuations.
Min Addresses Leveraged ETF Outflow Concerns
Min rejected claims that single-stock leveraged ETFs caused KOSDAQ trading volume declines. He cited a timing mismatch: individual investor outflows began early in the year, while leveraged ETFs launched in late May. Min attributed fund concentration to Samsung Electronics and SK Hynix's market dominance rather than leveraged ETF launches.
Active ETFs launched in March grew to include 8 asset managers with 800 billion won in assets under management and 100 billion won in average daily trading volume within 4 months. Min emphasized cooperation with private sector firms to attract institutional capital. He has about 1 year remaining in his term and prioritized successful segment system implementation as his key objective.
FAQ
What is Korea Exchange's plan for KOSDAQ restructuring?
Korea Exchange announced a 3-tier restructure dividing KOSDAQ's 1,800 listings into Select, Standard, and Alert segments within this year. The Select tier will feature curated quality companies with simultaneously launched derivatives and ETFs to attract institutional capital, addressing the 2022 Global Segment's lack of hedging tools.
Why did Alteogen decide to remain on KOSDAQ instead of transferring to KOSPI?
Alteogen, KOSDAQ's market cap leader, chose to stay on KOSDAQ. Min Kyung-wook interpreted this as a positive signal regarding segment reform and government activation policies. KRX data shows 11 of 16 companies that transferred to KOSPI in the last 10 years saw market cap decline by year-end in their transfer year.
