Discussion Forum with Related Agencies to Enhance Capital Market Transparency
Financial Services Commission, Financial Supervisory Service, Exchange, and Southern District Prosecutors' Office Attend
Exchange Mentions Measures to Prevent Recurrence of SG-Related Stock Price Manipulation
Son Byung-doo, Chairman of the Korea Exchange, is being interviewed at the Korea Exchange in Yeouido, Seoul on the 8th. Photo by Kang Jin-hyung aymsdream@
Son Byung-du, Chairman of the Korea Exchange, stated on the 23rd, "When placing orders for Contracts for Difference (CFD) trading, the actual trading entity will be indicated instead of the securities company."
Chairman Son made this remark at a related agencies' discussion forum held at the Korea Exchange in Seoul on the morning of the same day, aimed at enhancing transparency in the capital market. He added, "We will strive to improve the system to prevent the recurrence of the CFD incident."
At the event, Chairman Son discussed measures to eradicate unfair trading practices such as stock price manipulation in three major areas: resolving the SG-related unfair trading case, strengthening market surveillance systems, and improving regulations.
First, he pledged to concentrate all efforts on resolving the SG-related stock price manipulation incident. Chairman Son said, "We have completed the analysis of trading details for the eight problematic stocks and have notified the joint investigation team. We are also conducting additional analysis to determine whether the suspicious accounts were involved in other unfair trading activities."
In particular, a 'CFD Special Inspection Team' has been established in connection with this incident. A team of 20 market surveillance experts plans to closely monitor over 4,000 accounts.
Additionally, Chairman Son stated, "We will advance the surveillance system to prepare for evolving forms of unfair trading." The Korea Exchange plans to reorganize the abnormal trading detection system to enable early detection of stock price manipulation attempts over the medium to long term. They also intend to diversify methods for estimating linkages among suspect accounts and refine the analysis of trading patterns.
Furthermore, Chairman Son announced that, besides indicating the actual CFD traders, the unfair trading reporting system will be actively utilized as part of regulatory improvements.
He added, "If necessary, we will directly interview whistleblowers and promptly share specific information with related agencies to monitor the market with a broad perspective."
Meanwhile, the CFD stock price manipulation case surfaced last month when eight stocks simultaneously hit their lower price limits through Soci?t? G?n?rale (SG) channels. The prosecution is currently investigating Ra Deok-yeon, CEO of Hoan, who has been identified as a key figure in the stock price manipulation allegations, along with his associates.
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