KOREA CAPITAL MARKET INSTITUTE

In the wake of the introduction of book building in 1999, Korea had a chance to shift from the government-led IPO system to an underwriter-oriented one. The US IPO market firmly based upon book building is also referred to as a “gatekeeper” market where underwriters stand at the center of the information network controlling market efficiency and quality. In addition, gatekeeping by financial investment companies in the IPO market is viewed as the backbone of investment banking. Although the book building system has evolved and taken hold thanks to bottom-up initiatives in the US, Korea’s book building system was first formulated as part of top-down regulation initiated by the government. Since the inception, the system has gone through several major overhauls. Marking the 15th year of Korea’s book building system, Korea needs to review whether Korea’s IPO market is shifting towards an efficient “gatekeeper” market, and whether the investment banking function is being formed in the financial investment industry.

To discuss the issue, Korea Capital Market Institute will hold a policy seminar titled “Structural Changes in Korea’s IPO Market and Causes”. This seminar will systematically explore whether Korea’s IPO market has become a “gatekeeper” market since the adoption of book building, and then discuss about future policy directions for IPO regulation.