Assessment of Technology Firms to Be Reformed
As the reliability of technical evaluation on biotech companies has become an issue, South Korea’s stock exchange operator Korea Exchange (KRX) has decided to reform the evaluation system for technology firms for listing.
KRX announced on Sept. 3 that it has decided to implement an improved technical evaluation system starting Sept. 9 in order to speed up the special listing of excellent technology companies on the KOSDAQ market. This is intended to make a more thorough assessment of technology firms as the reliability of technical evaluation on such firms has been put into question following the debacles of such biotech firms as SillaJen Inc. and Kolon TissueGene Inc.
KRX has made it mandatory for each evaluation team to include at least four experts who have either a Ph. D degree or a certificate in the relevant field or has expertise in patents. In addition, it will increase the pool of evaluation agencies from the current 13 to 18 to assess a variety of technologies.
KRX will also extend the evaluation period from the current four weeks to six weeks as well as raise the number of on-the-spot inspections from the current one to more than two. Furthermore, it is planning to make specialized assessment agencies to hold meetings between the working groups on a regular basis to share methods and experiences of evaluations and raise efficiency and objectivity of technical evaluation.
On the other hand, KRX has decided to lessen the burden of special listings on material and component companies. Currently, material and parts companies are required to receive an assessment from two agencies for listing as an outstanding technology firm, but in the future, if they receive an A-rated assessment from one agency, they will not need to be assessed by another agency.