The Financial Supervisory Service Holds First Meeting of IPO Underwriting Innovation Task Force... Improvement Plan to Be Developed by Q2 Next Year

Financial Supervisory Service, Yeouido, Seoul. Photo by Jinhyung Kang aymsdream@

The Financial Supervisory Service (FSS) announced on the 21st that it held the first meeting of the IPO Underwriting Task Force (TF).

This TF was formed to develop effective countermeasures for persistent issues related to IPO underwriting, such as failure to identify significant investment risks and valuation based on excessive estimates. The meeting was attended by four securities firms, two asset management companies, the Korea Capital Market Institute, accounting firms, academia, the Korea Financial Investment Association, and the KOSDAQ Association.

The FSS stated, "We will create an institutional environment where the core functions of underwriting?resolving information asymmetry between issuers and investors and presenting appropriate public offering prices?can be faithfully fulfilled."

Earlier, on the 24th of last month, the FSS held a 'Meeting to Enhance Fairness and Trust in the IPO Market' with underwriters and related organizations. At the meeting, they reviewed current issues in the listing process triggered by the 'Pado incident' and announced plans to promote the TF.

At the TF meeting, participants agreed that for the IPO market to develop sustainably in the long term based on investor trust, it is necessary to strengthen the role of underwriters grounded in autonomy and responsibility. They also agreed to seek institutional support measures to establish reasonable business and practical practices.

They discussed the need for improvements in current systems and practical practices and decided to form working groups in five areas?internal control, corporate due diligence, public offering price calculation, business practices, and securities registration statement preparation?to develop specific improvement plans.

An FSS official explained, "We plan to prepare improvement measures by the second quarter of next year through efficient TF operations centered on the working groups, consultations with related organizations such as the Korea Exchange, and public hearings to gather broad opinions."