(KPL/ Yonhap)  The Republic of Korea's financial regulator said Tuesday it plans to introduce a set of enhanced regulations for institutions' investment in newcomers on the stock market as part of efforts to improve related regulations.

Also, those who fail to meet listing requirements will be exited faster than now under strengthened delisting rules, according to the Financial Services Commission (FSC).

Starting next year, over 40 percent of the initial public offering (IPO) shares will be first allotted to institutional investors who guarantee the holdings of IPO shares for a certain period, usually three or six months.

Currently, over 20 percent of IPO shares are sold to such institutional investors to help with the smooth debut of a new company on the stock market.

The measure will come as some institutional investors have been under fire for pocketing decent gains by selling IPO shares on the first day of trading, according to the regulator.

The FSC said it will also revamp delisting regulations to speed up the exit of companies that fail to meet a set of requirements.

Starting from 2029, a company whose market capitalization hovers below 50 billion won (US$3.47 million) and with revenues that stay below 30 billion will be exited from the main bourse.

Currently, a company is delisted when its market capitalization or sales fall below 5 billion won.

Also, a delisting process period will be shortened to a maximum of 2 years from the current 4 years, and a company that receives inappropriate audit reports for a second consecutive year will be delisted immediately, according to the FSC.

KPL