South Korea's financial regulators will introduce a cornerstone investor system for initial public offerings to curb a sharp drop in stock prices after IPOs are listed. The Korea Financial Services Commission said that according to the new system approved by the government on November 3, institutional investors who promise to lock in for at least six months can be allotted new shares in advance. The relevant regulations will come into effect on November 13 along with the amendments to the Capital Markets Law. The Korea Financial Services Commission said that introducing stable medium- to long-term institutions before IPO pricing should help strengthen investors' confidence in IPOs and help avoid a sharp decline due to concentrated sell-off by holders after stock listing.

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