Lee Bok-hyun Ahead of Alternative Exchange Launch: "Korean Stock Market Attractiveness Will Increase... Infrastructure Innovation"

Open Discussion for Improving Stock Market Infrastructure

Lee Bok-hyun, Governor of the Financial Supervisory Service, expressed expectations that the attractiveness of the Korean stock market will be enhanced if the Alternative Trading System (ATS) launches in March and the computerization of short selling is stably established. While meticulously reviewing any shortcomings until just before implementation, he also plans to consistently promote other capital market advancement tasks such as reforming the listing system.

On the morning of the 20th, Governor Lee attended the "Open Discussion for Improving Stock Market Infrastructure" held at the Korea Exchange in Yeouido and stated, "We will focus our supervisory capabilities on the computerization of short selling and the launch of the ATS to innovate stock market infrastructure and ensure successful establishment, thereby building a ‘fair and transparent financial paradigm’." This discussion, part of the 'Open Discussion' series for capital market advancement, focused on changes in the investment environment and improvements in stock market infrastructure ahead of the scheduled ATS launch and resumption of short selling next month.

First, Governor Lee said, "The computerization of short selling is a global public-private cooperation system attempted for the first time worldwide, which will significantly enhance the credibility of our capital market," and added, "With the launch of the ATS, investors' choices will greatly expand, and trading convenience will also increase dramatically." Amid many expected changes across the market, the plan is to use this as an opportunity to revitalize the Korean stock market.

He noted, "If these systems are stably established in our capital market, it is evident that the attractiveness of our market to global investors will be enhanced," and emphasized, "Since these are newly introduced systems, it is necessary to carefully check for any deficiencies until just before implementation." Ahead of the resumption of short selling at the end of March, the computerized system will enable real-time monitoring of key data such as designated overheated stocks and short selling ratios.

Additionally, with the ATS launch on the 4th of next month, domestic stock market trading hours will be extended to 12 hours, from 8 a.m. to 8 p.m. NextTrade, Korea’s first ATS, is an electronic trading platform where securities such as stocks can be traded outside the existing regular exchanges. On the first day of its launch, 10 stocks including Lotte Shopping, Cheil Worldwide, LG Uplus, and S-Oil will be traded through 28 securities firms.

On this day, Governor Lee also reaffirmed his commitment to promoting capital market advancement for fundamental structural improvement of the domestic stock market. He said, "Amendments to laws protecting shareholder interests should be developed through collecting opinions and building consensus among various stakeholders, considering ‘effectiveness’ and ‘balance’ to devise the optimal measures." He also repeatedly emphasized the necessity of reforming the listing system, stating, "Discussions on restructuring the market to enhance fairness and efficiency must begin promptly." Furthermore, he added, "A market system should be established where excellent companies are fairly valued and less competitive companies can naturally exit."

Governor Lee stated, "The longer the reform of the capital market is delayed, the more investors’ trust will be shaken," and urged, "Since companies are both the main agents and the greatest beneficiaries of capital market innovation, they must actively fulfill their roles and responsibilities to grow alongside the capital market."

Meanwhile, the discussion held jointly with the Korea Exchange, Korea Financial Investment Association, and NextTrade also featured presentations on topics such as 'In-house Balance Management System Operation Process' (KB Securities), 'Changes in Investment Environment Following ATS Launch' (NextTrade), and 'Order Allocation System Operation Direction in Multiple Markets' (Kiwoom Securities).