Preemptive Action to Comply with Trading Volume Limits
Trading Halted for 79 Stocks Until End of Month
The alternative trading system (ATS) NextTrade will proceed as previously announced on the 1st by reducing the number of stocks eligible for trading. This is a preemptive measure to avoid violating the "15% trading volume restriction rule."
Starting today, NextTrade plans to temporarily suspend trading of 53 stocks, including Pulmuone, until the end of this month. Considering the 26 stocks, such as YG PLUS, whose trading was already suspended in the first round on the 20th of last month, a total of 79 stocks will see trading halted for one month. However, since regular market trading (from 9:00 a.m. to 3:30 p.m.) via the Korea Exchange (KRX) remains open, the impact felt by general investors is expected to be limited.
On the 4th, the alternative trading system (ATS) "NextTrade (NXT)" opening ceremony was held at the Financial Investment Center Building in Yeouido, Seoul. From the third person on the left among the attendees are Eunbo Jung, Chairman of the Korea Exchange; Bokhyun Lee, Governor of the Financial Supervisory Service; Hanhong Yoon, Chairman of the National Assembly's Political Affairs Committee; Haksoo Kim, CEO of NextTrade; and Byunghwan Kim, Chairman of the Financial Services Commission, watching the status of the first transaction volume. 2025.03.04 Photo by Dongju Yoon
Due to this trading suspension, all 79 affected stocks will not be available for trading on both the regular markets (pre-market, main market, after-market) and the closing price market of NextTrade. Investors who mainly use the pre-market (8:00 a.m. to 8:50 a.m.) or after-market (3:30 p.m. to 8:00 p.m.) may face difficulties in buying or selling their stocks, so it is recommended to check in advance whether their stocks are subject to suspension.
A NextTrade official stated, "This measure is to ensure that the company does not exceed the trading volume limit for multilateral trading facilities as stipulated by the Enforcement Decree of the Capital Markets Act," adding, "Depending on future trading conditions, additional stocks may be excluded or the suspension period may be extended."
The current Enforcement Decree of the Capital Markets Act stipulates that, for alternative trading systems, the average daily trading volume over the past six months as of the end of each month must not exceed 15% of the total market trading volume. Since April, the average daily trading volume on NextTrade has reached 210.44 million shares, which is 13% of the domestic stock market's average daily trading volume of 1.62394 billion shares during the same period.
As NextTrade, which launched on March 4 this year, is subject to this regulation for the first time on the 30th of this month, concerns were raised that a violation of the "15% rule" could cause serious disruption. As a result, the company took preemptive action to limit trading volume. In August, NextTrade's average daily trading value was 7.2392 trillion won, already approaching half (46.9%) of the Korea Exchange's 15.4263 trillion won.
Marking its six-month anniversary on the 4th, NextTrade has rapidly emerged as a challenger to the Korea Exchange, which has maintained a near-monopoly for almost 70 years, as individual investors now account for 90% of its users. Although it posted a deficit of 7.1 billion won in the first quarter, NextTrade turned a profit in the second quarter, recording a net income of 5.7 billion won.
Haksoo Kim, CEO of NextTrade, stated, "NextTrade has driven positive changes such as extending trading hours in the Korean stock market, reducing trading costs for investors, and diversifying order types. It has also been credited with contributing to the recent revitalization of our stock market," adding, "I believe NextTrade's growth is the result of active cooperation and efforts from the government, the financial investment industry, and related institutions."
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