South Korea adopts cornerstone lockups to curb post-IPO selloffs

South Korea's cornerstone investor system for initial public offerings takes effect on November 13, pre-allocating up to 20 percent of the institutional tranche on KOSPI listings and 30 percent on KOSDAQ listings to institutions that accept staggered lockups of six, eight and ten months.

Why it matters: The reform rewrites how Korean IPOs are priced and held, moving demand checks before the price band is set and tying a large block of institutional allocations to long holding periods in a market known for sharp post-listing selloffs.

Data as of Financial Services Commission announcement of November 3, 2026 that a Cabinet meeting approved the enforcement decree amendment, reported by Seoul Economic Daily on November 3 and read in full in this run; the lockup schedule, allocation caps and the 20 times asset requirement are the commission's own, from its July 30, 2026 press release setting out the framework. The item surfaced in this run's Asia-Pacific pool via Bloomberg reporting of November 5, 2026. Developing item.

South Korea will introduce a cornerstone investor system for initial public offerings on November 13, after a Cabinet meeting approved the amendment to the enforcement decree of the Financial Investment Services and Capital Markets Act, the Financial Services Commission said on November 3. Cornerstone investors receive shares in advance from the institutional tranche, capped at 20 percent of that tranche for KOSPI listings and 30 percent for KOSDAQ listings, and must hold 50 percent of the allocation for six months, 30 percent for eight months and the remaining 20 percent for ten months, with participating institutions required to hold equity capital or entrusted assets of at least 20 times their subscription.

A preliminary demand survey starts at the same time, letting underwriters gauge institutional prices and volumes before a securities registration statement is filed and before the indicative price range is set. The commission said securing medium and long term institutional investors in advance should cushion the share price declines caused by heavy selling immediately after listing, and the rules bar cornerstone contracts with institutions that hold a stake in the issuer.

South Korea adopts cornerstone lockups to curb post-IPO selloffs

Sources