KOSDAQ to be separated from KSDA

The government plans to entirely separate KOSDAQ Securities from the Korea Securities Dealers` Association in order to inject vitality into the KOSDAQ market.

It is based on the belief that there is a limit to the development of the KOSDAQ as long as KSDA runs the market. The Ministry of Finance and Economy and the Financial Supervisory Commission have decided to restructure the KOSDAQ market to develop it as an independent market and build it to compete with the Korea Stock Exchange on an equal footing. The plan is intended to protect investors and build the KOSDAQ into an organized independent market by rearranging the current system, shifting away from the current model of putting it under the control of the KSDA.

The over-the-counter market has grown substantially, and it is necessary to change the ruling structure in order to make it protect investors, the government says. The government learned that the KOSDAQ market hardly can develop under the current system, in which the KSDA, the leading shareholder, is intervening in every part of the market¡¯s operation.

The authorities pointed out that the situation hampers the development of the KOSDAQ market. Registration, surveillance of stock prices and trading inspection, which have been done by the KSDA, will be transferred to the KOSDAQ. However, it will be involved in market operation as well as inspection of the market, like the NASDAQ in the United States. The KOSDAQ Commission, which has been controlled by the KSDA, will become an independent organization.