The Korea Exchange, or KRX, is expected to ease regulations concerning stock splits in the wake of Samsung Electronics’ latest decision to implement a 50:1 split.
“A weak spot has been revealed in the domestic stock trading system, leading us to consider shortening the trading suspension period following stock splits,” said a KRX official on March 4. “We also may be cutting the suspension period in cases of merger and capital reduction.”
The exchange is expected to announce the revisions later this week.
Currently, trading is suspended for 10-15 days after a company decides on a stock split to give it time to rearrange its stockholders’ list.
The KRX has been seeking ways to minimize the fallout of Samsung Electronics’ announcement in late January that it would implement a stock split to enhance shareholder value. If approved at a stockholders meeting later this month, stocks of Samsung Electronics -- Korea’s No. 1 market cap -- will be suspended from trading between April 25 to May 15.
To cope, the Korea Exchange formed a task force with Korea Securities Depository, IT service provider Koscom, Korea Financial Investment Association and other securities, futures and asset management firms.
Upon discussion, the stock operator decided to revise the overall system for all Kospi-listed firms in order to avoid criticism of favoring Samsung and to use this opportunity to enhance the system.
Other companies that are awaiting trade suspensions following stock splits include JW Life Science, Mando, Fila Korea, Kisco Holdings and Korea Flange, according to the Korea Exchange.
It is not yet certain whether the Kosdaq market will follow suit.
By Bae Hyun-jung/The Korea Herald (firstname.lastname@example.org