More securities firms set to join move to establish alternative trading system

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Korea Exchange’s Seoul office building / Yonhap

By Lee Min-hyung

More securities firms are moving to speed up their discussions on establishing the nation’s first alternative trading system (ATS).

The ATS establishment committee ― which consists of the Korea Financial Investment Association (KFIA) and a group of seven major securities firms here ― will grow in size, with a group of more than 20 other mid- to small-sized brokerage houses that are showing an interest in joining the committee.

This is expected to help speed up the long-awaited establishment of the ATS, which refers to a non-exchange trading platform. The Korea Exchange has for more than six decades served as the sole stock trading authority here, and expectations are that the possible launch of the first ATS here will help reshape the industry in a way that will foster competition with the existing exchange operator.

It has not been confirmed what kinds of services will be available through the ATS, but investors are widely expected to engage in stock transactions even at night. For now, investors can buy and sell listed stocks here between 9 a.m. and 3 p.m. on business days.

However, the launch of the ATS will not come in the near future, as the securities firms have yet to sign an official contract over the move.

Earlier this year, Korea Exchange Chairman and CEO Sohn Byung-doo expressed his view on the establishment of the ATS.

“Even if the ATS establishment is a step in the right direction in terms of upgrading the capital market infrastructure here, the ATS should also be subject to the same regulations as the Korea Exchange,” he said in a press conference in January.

Despite the exchange operator’s careful reaction, the drive is generally getting favorable responses as the introduction of the ATS will help attract more capital into the local stock market.

Back in 2019, the KFIA established the committee with Korea’s major securities firms ― such as Mirae Asset Securities, Samsung Securities, NH Investment & Securities and Samsung Securities ― for the earlier introduction of the new trading platform.