The Korea Exchange (KRX) will add new technology fields including semiconductor design and intellectual property (IP), aerospace and robotics to the expert evaluation process for KOSDAQ listings under the technology special exemption track. It will also expand the pool of advisory experts to include industry and commercialization specialists and tighten internal controls at rating agencies. The aim is to verify the competitiveness and commercialization potential of technology companies in line with industrial change.
KRX said it held a briefing on the 19th at its Seoul office in Yeouido, Seoul, on a plan to upgrade its standard technology assessment model and overhaul the expert evaluation framework. The exchange plans to finalize the plan this year, reflecting input from underwriters, expert rating agencies, venture capital firms and companies preparing to list.
The expert evaluation is the first gateway for a technology special exemption listing, a procedure that examines a company's technological capability and business viability. KRX has been pursuing improvements to the system since March and completed a related research project last month. It drew up the overhaul based on views from rating agencies and screening officials, key success factors by industry and an analysis of existing assessment reports.
The overhaul centers on streamlining technology assessment indicators and improving how expert evaluations are run. Assessment items that overlap or offer little discriminating power will be trimmed, and quantitative measures that do not fit the purpose of listing reviews or fail to account for the characteristics of individual industries and companies will be excluded where possible.
The two-track structure that separates a company's "industry" from its "proprietary technology" into industry modules and technology modules will be kept. Taking into account industrial structure and the nature of convergence technologies, applicants will be able to select multiple industry modules and multiple technology modules to match their actual business.
For technology modules, the existing categories such as artificial intelligence (AI) and big data and immersive content will be reorganized, while new fields including semiconductor design and IP, cybersecurity, aerospace and robotics will be added. An industry checklist will also be introduced to prevent applicants from choosing an unsuitable industry or avoiding technology modules needed to verify their core competitiveness.
The advisory panel will be expanded to six members from the current four. One industry or commercialization specialist will be added to the panel, which now consists of three Ph.D. holders and one patent attorney, to strengthen its ability to judge actual commercialization prospects.
The preparation process will also be standardized. KRX will provide in advance a standard table of contents and writing guide for technology business plans, frequently asked questions and a list of documents to be submitted. The plan sets evaluation fees at 30 million won for domestic companies and 35 million won for foreign companies.
Internal controls at expert rating agencies will be tightened as well. Rating agencies that also run for-profit operations will be required to disclose on their websites every six months how they are implementing internal control guidance and information on the commercial work they have taken on. The step is intended to manage concerns over conflicts of interest between for-profit operations and expert evaluation work.
Dispute resolution procedures will be written into the rules, but reassessment will be allowed only when an error affecting the outcome is confirmed. KRX will set criteria for newly designating rating agencies and removing them from the roster, and expand indicators measuring assessment capability for use in regular reviews and work assignments. It is considering giving top-performing agencies more assignments or priority access to new programs.
"The technology special exemption listing system has delivered results, establishing itself as a major listing route, but resolving the KOSDAQ market discount requires effort from all market participants," said Min Kyung-wook, deputy president of the KOSDAQ market division at KRX. "We will spare no support needed to raise the credibility and expertise of the expert evaluation system, the first gateway to a technology special exemption listing."