How are redeemable convertible preferred shares handled ahead of a listing?

To protect minority shareholders, the Korea Exchange advises that it is desirable for convertible (redeemable) preferred shares issued by a listing applicant to be converted into common shares before listing, preferably before applying for the preliminary listing review.

In particular, if the applicant is in a state of capital impairment, they must in principle be converted before the preliminary review application. The exchange also checks whether RCPS are subject to mandatory holding, and if shares are retired through the exercise of a redemption right during the mandatory holding period, the mandatory holding obligation for them also lapses.