Financial authorities are examining the Korea Exchange's (KRX) system failure related to the recent trading halt incident on the Korea Composite Stock Price Index (KOSPI) market. If necessary, they plan to initiate an inspection to identify the cause.
According to financial authorities on the 23rd, the Financial Supervisory Service (FSS) is currently investigating the situation following a system error at the exchange on the 18th, which caused KOSPI stock trading to halt for about seven minutes during market hours. An FSS official stated, "We are reviewing the situation through the exchange to determine whether an inspection is necessary and when it should be conducted," adding, "A trading halt in the securities market is naturally an event that authorities must examine."
This is the first time since the integrated launch of the Korea Exchange in 2005 that all KOSPI stock trading has stopped during regular trading hours. Previously, the exchange explained that the cause of the system failure was a conflict between the newly introduced 'mid-price order' system, implemented alongside the launch of the alternative trading system NextTrade, and the existing logic. However, since this could affect the external credibility of the Korean capital market, it is analyzed that the FSS is also weighing whether to conduct an inspection.
Accordingly, the FSS is expected to review the trading systems of both the KOSPI and KOSDAQ markets and comprehensively examine system safety following the launch of NextTrade. Specific measures to prevent recurrence are also likely to be requested.
The inspection of the exchange is conducted by the FSS under the delegation of the Financial Services Commission. Under the Electronic Financial Transactions Act, the FSS is authorized to inspect the electronic financial business and related financial status of financial companies and electronic financial service providers, providing sufficient grounds for conducting its own inspection.
The FSS previously conducted an inspection of the exchange's trading system in 2014. In 2021, it carried out a comprehensive inspection covering major business areas.
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