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KRX to Establish Private Market to Support Startups’ Stock Trading Before IPO
Private Market for Startups
KRX to Establish Private Market to Support Startups’ Stock Trading Before IPO
  • By Jung Min-hee
  • March 24, 2016, 02:30
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The Korea Exchange (KRX) supports startups by setting up a “private market” to help crowdfunding firms trade stocks of startups before their initial public offering (IPO).
The Korea Exchange (KRX) supports startups by setting up a “private market” to help crowdfunding firms trade stocks of startups before their initial public offering (IPO).

 

The Korea Exchange (KRX) is taking the initiative in supporting startups. Through the change on articles of incorporation, it will set up the private market to help crowdfunding firms trade their stocks before the initial public offering (IPO) and establish the M&A intermediation network to promote fund collection before the IPO.

According to financial investment industry sources on March 23, the KRX is planning to deal with the change on articles of incorporation at the general shareholders meeting on March 29 to allow startups to raise funds and activate the collection market. .

The main changes on articles of incorporation include the establishment of crowdfunding portals and M&A intermediation networks at business incubator centers to support startups.

In addition, the KRX will build the Private Market to enable crowdfunding companies to trade their stocks before the IPO. Through this, it plans to improve fund collection functions of crowdfunding companies before they are listed. In a bid to smoothly raise funds for startups, it will construct the growth ladder system which leads from crowdfunding, the Private Marekt, and KONEX to KOSDAQ.

The KRX will also establish the M&A mediation network by using information about listed companies on the stock exchange. It will combine and provide enterprise information ranging from crowdfunding firms to listed firms. Through this, the KRX plans to reduce M&A search costs and raise the M&A success rates.