New Unlisted Securities Market to be Opened in Sept.

In September, “KPM,” a Korean version of the NASDAQ Private Market (NPM) that allows users to trade unlisted stocks via mobile applications, will be opened. It is created based on the unlisted stock trading platform founded by NASDAQ and SharesPost, the largest online unlisted stock trading broker in the U.S., in 2014.

Unlike K-OTC BB, the existing over-the-counter transaction market, the KPM will be operated focusing on new businesses which have matchless technical skills and has great growth potential. 

According to the financial authorities and financial investment industry sources on March 24, the Korea Exchange (KRX) worked together with the Financial Services Commission (FSC) and completed the design of the KPM platform that allows users to trade unlisted securities between individuals by using blockchain technology and mobile apps. They plan to choose a KPM developer with the blockchain system as early as April or May, develop and test until August, and open the platform in September.

In KPM, a seller and a buyer can submit orders, and check and trade each other through a blockchain access app. They can negotiate and conclude transactions via chat on messenger apps. Also, account transfers, deals and asking prices will be announced in real time right after the conclusion.

In particular, not many people took part in the existing outside market since all orders and deals are submitted and signed manually but it has low profitability. However, the KPM is expected to enable individual investors to trade stocks conveniently by posting information about deals and asking prices in real time.

In a bid to prevent false asking prices, the KRX and the FSC will establish the system in the KPM that allows users to order shares only owned by them considering the fact that there is a low credibility in the unlisted securities trading market between individuals as the unlisted securities private trading site has lots of uncertainties in settlements.

In addition, the financial authorities is considering plans to activate small M&As to encourage M&As of crowdfunding firms in the over-the-counter market, including the KPM. The FSC will select five mid-term specialized financial investment companies first and choose a final M&A special agency in May at the latest after additional reviews.