Alternative System
The establishment of an alternative trading system (ATS) is expected to pick up some speed with a bill tabled to put a limit on the Korea Exchange’s shareholding in the Korea Securities Depository (KSD).
According to the bill, the shareholding is limited to 5%, although the current shareholding ratio is 70.43%, so that potential problems related to the independence and neutrality of the ATS can be forestalled.
The bill was proposed on December 28 by those including The Minjoo Party lawmaker Park Yong-jin. “The ATS is scheduled to be launched in June next year but the KSD’s position as a subsidiary of the Korea Exchange can hinder the progress,” he said, adding, “This amendment of the Capital Markets Act is to cope with the obstacle and ensure fair competition between the ATS and the Korea Exchange.”
The KSD welcomed the news. “The shareholding limit has its own significance as a tool for ensuring the efficiency and stability of the stock market as a whole and dealing with conflicts of interests between market participants,” it mentioned, continuing, “We need to listen to the opinions of as many market participants as possible and make market-friendly efforts with regard to the management of the KSD as a part of public financial infrastructure.”