A Listing Rule Can Be Stopped Twice: Once Before It Removes Anyone, and Once After the Exit Has Closed

Two markets spent 2026 raising the same kind of threshold. Both ended the year with that threshold suspended. The sequence in which the suspension arrived is the part worth reading.

A continued-listing floor based on market capitalisation is a rule with an unusual property: the company does not file the variable that decides it. Revenue, equity and audit opinions arrive from the issuer. Market value arrives from everyone else. When an exchange raises that floor, it changes an outcome the issuer cannot directly produce, which is why the procedure for objecting to the rule carries more weight here than it does for a filing-based criterion.

What the two markets did

Nasdaq's new standard requires USD 5 million in market value of listed securities and pairs it with a substantially accelerated removal process — the traditional cure period and the automatic stay on appeal are both removed. The SEC approved it on 22 July 2026. On 4 August 2026, following a petition by the Small Public Company Coalition, the rule was stayed pending review. The SEC set 6 October 2026 as the deadline for public comment. As of that review, the standard is not in effect and no listed company is subject to it.

KOSDAQ's floor moved from KRW 4bn in January 2026 to KRW 15bn in July 2026, with a KRW 20bn step that had been scheduled for January 2027 brought forward to July 2026. The KOSPI equivalent is KRW 30bn. At the same time, the condition for curing a deficiency was rewritten: a company previously had to recover for 30 cumulative days, or 10 or more consecutive trading days, within a 90-trading-day window; it now has to recover for 45 consecutive trading days.

On 2 October 2026 the Seoul Southern District Court, Civil Division 51, granted an injunction suspending KM Pharmaceutical's 14 September delisting decision (case 2026Kahap1532). The court held that Article 54(1)(12) of the KOSDAQ Listing Regulations and Article 2(1) of its Supplementary Provisions are so far outside the principle of proportionality as to be contrary to justice, and therefore unlawful and void. It further found that the exchange had raised the standard substantially without providing any opportunity to comment or to object, excessively infringing the right to procedural participation. Juyeon Tech, listed on KOSPI, obtained the same relief the same day. Liquidation trading was halted for Sejin T&S and AFW. Nine KOSDAQ companies had received market-cap delisting decisions as of 25 September 2026, with Fintel added on 30 September.

The finding

Both rules were stopped. One was stopped at the rule-making stage, by the mechanism built into rule-making: a petition, a stay, a comment period. The other was stopped at the enforcement stage, by a court, after the rule had already produced decisions.

That difference is not procedural trivia, because stopping a delisting and restoring a market are two different acts. The injunction suspends the effect of the delisting decision. It does not reopen trading. Sejin T&S rose 13.55% to KRW 1,031 on 2 October before trading was halted at 14:06; AFW's removal, scheduled for 7 October, is suspended with its shares frozen; Gold&S and Fintel are awaiting decisions. The exchange is reviewing whether the regulations apply to other companies in the same position. A shareholder in those names now holds a security that is neither delisted nor sellable.

Where R-Risk reads this

On the Governance axis. The axis is not about whether a rule is strict; it is about who was able to speak before the rule bound them, and at what point in the sequence an objection is still capable of changing an outcome rather than only reversing one. In the Nasdaq case the objection arrived while the rule was still a proposal, and the market stayed open. In the KOSDAQ case the objection arrived as litigation, after decisions, and the market closed first.

What this does not establish

It does not establish that either threshold is set at the wrong level; neither the court nor the SEC review has decided that. The injunction is provisional — it suspends effect pending final judgment, and a final judgment may go the other way. It does not tell us how long the halts will last, and it does not tell us whether days during a trading halt count toward, or are excluded from, the 45-consecutive-trading-day cure. That last point is unresolved on the public record as of this writing, and KONNECT-AI RESEARCH has not verified it.

What an individual investor can check

Three items, all in public filings. First, the delisting decision notice itself and its date, which is what an injunction suspends. Second, the trading-halt notice, which is a separate action with a separate basis — confirm whether a suspension of the delisting decision also lifted it, because in these four cases it did not. Third, the cure condition in the listing regulation as currently worded, and the market-value series the company would need to produce to satisfy it. If a company cannot trade, ask what mechanism is supposed to generate the days the rule counts.

This article is for information only and is not investment advice or a solicitation to buy or sell any security.

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