Eun Sung-soo: "Complete Abolition of Market Makers 'Irrational'... Will Cause More Complaints"

Eun Sung-soo, Chairman of the Financial Services Commission, is delivering opening remarks at a meeting with representatives of financial investment-related organizations and securities firms held at the Korea Exchange in Yeouido, Seoul on the 15th. At this event, Chairman Eun reviewed the progress of follow-up measures on short selling and recent stock market trends. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Ji-hwan Park] Eun Sung-soo, Chairman of the Financial Services Commission, stated on the 15th that regarding opinions calling for the complete abolition of the market maker system, which have been raised by some, "It plays a positive role in facilitating smooth transactions for investors," and that complete abolition could rather lead to other complaints.

After a meeting with representatives of financial investment-related organizations and securities firms held at the Korea Exchange in Yeouido, Seoul, Chairman Eun told reporters, "The market maker system has a positive effect in that institutional investors match volumes when supply and demand do not align."

He pointed out, "If the market maker system is completely abolished, there could be situations where bid and ask prices do not match, causing transactions not to be executed," adding, "If such a situation occurs in our country's capital market, it would be a bigger problem, and complete abolition would likely cause other complaints."

Regarding the recent trend of foreign investors returning to net buying ahead of the short-selling resumption next month, Chairman Eun evaluated it as a positive signal. He said, "For us, the resumption of short selling means moving toward normalization, so we hope foreign investors will return." While the return of foreign investors is a good sign, he noted that since the resumption of short selling could increase selling pressure and other risk factors, it is necessary to observe the trend further to see which effect will be stronger.

Regarding the increasing cases of domestic companies such as Coupang listing on overseas stock exchanges, he emphasized, "Coupang and other companies are considering direct overseas listings, so naturally the Korea Exchange is on alert," adding, "The Exchange is also communicating with them to understand what inconveniences they face with domestic listings and to hear their thoughts."