South Korea will offer up to three million won in tax benefits to individual investors who snap up shares on the small-cap KOSDAQ market.

Finance Minister Kim Dong-yeon announced the measure during a meeting of economy-related ministers on Thursday as he said the government will actively support innovative growth by breathing new life into the KOSDAQ market.

He said the government will aim to make the country's secondary bourse a healthy and trusted market that will serve as an essential framework for promoting the establishment of venture firms.

Financial authorities will also launch a new index comprising of both benchmark KOSPI-listed companies and KOSDAQ-listed firms next month. The new index, called KRX 300, will include two-hundred-32 KOSPI-listed firms and 68 KOSDAQ-listed firms.

The rate of return for the index will average five-point-one percent a year which is higher than the benchmark KOSPI's four-and-a-half percent and lower than the KOSDAQ's eleven-point-nine percent.

Korea Exchange and Korea Securities Depository will create a fund worth 300 billion won to invest in KOSDAQ-listed firms which have undervalued stocks on KOSDAQ.