South Korea is raising the bar for initial public offerings by subsidiaries backed by parent companies, introducing stricter shareholder approval requirements.
The regulatory shift targets related-party transactions, aiming to enhance governance standards and protect minority investors in a market where conglomerate structures remain prevalent.
The move comes as domestic equity markets face headwinds in attracting foreign capital.
Recent efforts to bolster liquidity and lure exchange-traded fund inflows have struggled to gain traction, with investors remaining cautious about corporate governance risks.
By tightening the rules for subsidiary listings, regulators are signaling a renewed focus on transparency and fairness in capital raising.
This development adds to a series of structural challenges for Korean equities.