Effective from May 10, "Due to Cost Burden"
Third-Party Replacement Shipping Service Also Increased to 2,000 Won
All Top 10 Securities Firms Maintain Paid Policy
Among the top 10 securities firms, Kiwoom Securities, which was the only one to maintain a 'free policy' in the online public offering subscription market, is taking the last train to paid service.
According to the financial investment industry on the 24th, Kiwoom Securities will charge a fee of 2,000 KRW for online public offering subscription transactions starting May 10. This applies to subscriptions made through Home Trading Service (HTS), Mobile Trading Service (MTS), and ARS. Previously, fees were only charged for offline branch subscriptions through Kiwoom Financial Center, but from now on, fees will also be applied online. Additionally, a 2,000 KRW fee will be charged for reservation of public offering stock transfer to other firms, which was previously free both online and offline. The fee related to the stock transfer service will be raised from the previous 1,000 KRW to 2,000 KRW across both online and offline channels. No fees will be charged if the public offering shares are not allocated.
Kiwoom Securities cited cost burden as the reason for this policy change. A Kiwoom Securities official explained, "Public offering subscriptions require a lot of manpower and physical resources," adding, "We changed the standards to cover those costs and to ensure system stability."
Domestic securities firms had already introduced paid policies early in 2022-2023 due to cost burdens. Currently, major securities firms charge fees ranging from 1,000 to 3,000 KRW for online public offering subscriptions at the lowest grade, such as the general grade. Among the paid firms, the lowest fees are charged by Meritz Securities, BNK Investment & Securities, and Kyobo Securities, while the highest fees are charged by Yuanta Securities.
Some securities firms have introduced measures to waive fees conditionally or by dividing membership grades. For example, Mirae Asset Securities exempts public offering subscription fees from the 'Silver' grade and above, except for the lowest 'Bronze' grade, during online subscription processes. To raise the grade, previous transaction records must be increased. KB Securities allows customers to raise their grade by linking family accounts or subscribing and consenting to MyData services, which awards points.
The number of securities firms offering free online public offering subscription fees has decreased to three: Hanyang Securities, Daol Investment & Securities, and SangSangin Securities. However, these firms rarely serve as lead managers in the initial public offering (IPO) market, so investors are unlikely to benefit significantly.
Individual investors expressed regret over Kiwoom Securities' abolition of the free fee policy. Since investors receive only 1-2 shares through equal allocation and then have fees deducted, their final returns are lower than expected. Kiwoom Securities had a 30% share of individual investors as of last year. Individual investors responded with comments such as, "The competition for public offerings is already high, so the fee increase news is disappointing," and "It would be good if they provided exemption conditions like other firms."
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