Will an Alternative Exchange Competing with Korea Exchange Emerge?... Fintech Competition Intensifies

Seoul Exchange Unlisted to Apply for Alternative Exchange Business License Early Next Year

[Asia Economy Reporter Gong Byung-sun] Riding on the stock market boom, movements to establish alternative trading systems (ATS) competing with the Korea Exchange are becoming more active. Competition is intensifying as fintech companies also join the push to enter the alternative trading system market.

On the 23rd, the unlisted stock trading platform "Seoul Exchange Unlisted" announced that it plans to apply for an alternative trading system business license early next year and is currently selecting a consulting firm to prepare the establishment plan.

The Seoul Exchange stated that it plans to set up the alternative trading system with capital of approximately 130 billion to 150 billion KRW and secure competitiveness by lowering trading fees to free or very low levels. They believe that advanced fintech technology can significantly reduce platform operating costs, allowing fees to be lowered.

They also plan to develop a business model that breaks away from the traditional trading fee-centered structure. This is because a sharp decline in stock trading volume due to economic crises or credit crunches could cause operational difficulties. In particular, they aim to create a business structure capable of responding to crises under the assumption that an economic crisis will occur within the next five years.

Seoul Exchange plans to form a consortium by attracting large IT companies and foreign capital and devise a shareholder composition plan that can be smoothly accepted by the public. They will also explore the possibility of overseas expansion in the future.

Meanwhile, the consortium of the Korea Financial Investment Association and securities firms, which had remained in the discussion stage for several years, has recently resumed progress. According to the Financial Investment Association, the association along with securities firms such as Mirae Asset Securities, Korea Investment & Securities, NH Investment & Securities, KB Securities, Samsung Securities, and Kiwoom Securities have formed a consortium and are conducting a feasibility study on the alternative trading system business through a consulting firm. They plan to start the establishment process of the alternative trading system based on the study results expected by the end of July.

The stock market boom has played a significant role in the active movement to establish alternative trading systems. Additionally, the Korea Exchange, which had been negative toward alternative trading systems, has recently shifted toward acceptance. In a New Year's press conference in January, Sohn Byung-doo, Chairman of the Korea Exchange, said, "It has been known that the Korea Exchange opposed alternative trading systems, but I think that time has passed."

A Korea Exchange official said, "Alternative trading systems only have trading functions, and other parts such as listing, settlement, and market surveillance must utilize the Korea Exchange infrastructure, so there will be many areas requiring cooperation," adding, "We will hold practical discussions with the alternative trading system side on how to integrate and display quotes and how to share related costs."

This content was produced with the assistance of AI translation services.