South Korea's chief financial regulator pledged Thursday to ease regulations on the third stock exchange for start-ups to vitalize the tepid market and strengthen the nation's three-pronged bourse system through competition.

Currently, the benchmark KOSPI market serves as the top-tier platform for large-cap players while the secondary KOSDAQ market is mostly for mid-sized tech-savvy ventures. The third KONEX market was opened in June 2013 for start-ups so that they can raise capital more easily.

"We will diversify ways for market listing to encourage more start-up companies to go public and drastically lower the deposit regulations to reform (the KONEX)," Yim Jong-yong, chairman of the Financial Services Commission, said in a meeting with officials from venture capitalists. "We will soon announce measures to reorganize the KONEX to boost its trading."

The government in January delisted the KRX as a public institution, six years after putting the bourse under its control, to boost its competitiveness at home and abroad. The FSC has oversight of the stock exchange.

Having started slow, KONEX has picked up somewhat this year, its daily average turnover for the first two months of this year more than doubled to 830 million won ($743,394) from 390 million won at the end of last year.

But the bourse has yet to become a solid incubator for young businesses due to tight regulations and still thin trading volume.

Only institutions or individual investors with deposits of more than 300 million won are allowed to participate in the third market. The minimum amount for a transaction is set at 100 shares.

Seventy-one companies were listed on the KONEX as of Thursday.

"(The FSC) will put first priority on financing venture firms and communicate with the market to promptly prepare related measures," Yim said. "Competition between the KOSPI, KOSDAQ and KONEX, as well as competition between listed markets and off-board markets, need to be strengthened."

The former chairman of Nonghyup Financial Group, the nation's fourth-largest banking group, has been calling for reforms in South Korea's financial industry that heavily relies on traditional sources of income -- commission and interest from lending to investors.

Yim's pledge on financial reform and the venture capital market was seen as part of broader efforts to support President Park Geun-hye's "creative economy" initiative, which is designed to foster new economic drivers beyond the nation's traditional manufacturing and heavy industries.

"The capital market should discover new possibilities and help them succeed so as to provide more opportunities to launch new businesses and create jobs," Yim said. "There should be more financial instruments because investment demand is fast rising to prepare for retirement and asset management in an era of a low birthrate, fast-aging population and low interest rates." (Yonhap)