Frequent IT Failures in Securities Industry... Financial Supervisory Service Issues 'Consumer Alert'

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[Asia Economy Reporter Park Ji-hwan] Recently, as stock trading has increased due to the stock investment boom, the Financial Supervisory Service (FSS) has issued a consumer alert warning following frequent system failures in securities firms' Mobile Trading Systems (MTS) and Home Trading Systems (HTS).

According to the FSS on the 9th, the number of system failures at securities firms surged from 15 cases in 2019 to 28 cases last year. In the first quarter of this year alone, 8 cases occurred. The number of related complaints decreased from 241 in 2019 to 193 last year. However, this year, 254 complaints have been filed in just three months, surpassing the annual number of complaints in previous years. This is due to increased stock trading driven by heightened interest in stock investment sparked by last year's Donghak Ant Movement, as well as the popularity of public offering subscriptions in the IPO market, which led to a sharp rise in the use of securities firms' MTS and HTS.

The FSS emphasized that, to prevent damage from system failures, investors should check alternative order methods in advance besides their primary trading channels (MTS or HTS) at their securities firms. This is because attempting to place a sell order via MTS may fail due to connection errors caused by a surge in access volume, potentially resulting in losses from untimely sales.

In such cases, it is useful to visit a branch or customer center or place substitute orders via phone. For this reason, it is necessary to confirm the contact information of major branches and customer centers of the securities firms you usually trade with in advance.

Additionally, the FSS advised not to panic during system failures and to always keep order records, even if orders are delayed. If substitute orders are impossible or some orders are not executed, investors can apply for compensation from the securities firm based on the originally intended order details. Compensation is only possible if the consumer's trading intent can be objectively verified through phone calls, log records, or other evidence, so keeping order records is essential. Besides keeping order records, to receive compensation, investors must submit a compensation request through the securities firm's customer center, branch, website, or app, including details of the order (time, stock, quantity, price) and the scope of compensation desired.

Furthermore, the FSS stressed that market measures such as trading halts are not system failures. In March last year, the Korea Exchange activated a circuit breaker to halt all market trading for 20 minutes to stabilize the stock market. This was to provide investors with time for calm investment decisions amid the market crash caused by the COVID-19 pandemic.

An FSS official stated, "There are cases where trading is halted or restricted due to market measures activated by related institutions such as the exchange to stabilize the stock market," and added, "Investors should be careful not to confuse these with securities firms' system failures during trading."

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