Number of IT System Failure Disputes in Securities Industry Nearly Quadrupled in First Half of This Year

Short-Term Concentration of Trading Volume Due to Expansion of Stock Market Trading Scale and Public Offering Boom

(Provided by Korea Exchange)

[Asia Economy Reporter Gong Byung-sun] The number of disputes related to system failures in the securities industry during the first half of this year has nearly quadrupled compared to the first half of last year.

According to the Korea Exchange Market Surveillance Committee (MSC) on the 18th, the total number of complaints and disputes from 28 out of 58 securities and futures companies in the first half of this year reached 3,449 cases, a 75.1% increase compared to the same period last year (1,970 cases).

By type, complaints and disputes related to system failures and order execution mainly increased. The number of disputes related to system failures was 2,025 cases, a 285% increase compared to the same period last year (526 cases). Order execution disputes were 74 cases, a 12.1% increase compared to the same period last year (66 cases). Order execution disputes mainly occur due to errors or delays during forced liquidation and order submission processes.

The MSC explained that system failures occurred due to the expansion of trading volume in the stock market and the short-term concentration of trading volume caused by the public offering investment boom. The stock market trading value increased significantly for two consecutive years, from 2,283 trillion won in the first half of 2019 to 4,514 trillion won in the first half of last year, and 7,414 trillion won in the first half of this year. The number of personal accounts submitting quotes also increased from 14.94 million in the first half of 2019 to 23.73 million in the first half of last year, and 58.66 million in the first half of this year.

As the number of investors using Home Trading System (HTS) and Mobile Trading System (MTS) increases, the risk of complaints and disputes related to connection and order failures is expected to rise. In the first half of this year, complaints and disputes related to order media such as HTS and MTS were 2,220 cases, a 223% increase compared to the same period last year (688 cases).

A Korea Exchange official said, “With highly anticipated initial public offerings (IPO) scheduled for the second half of the year, if access for trading becomes concentrated, there is a risk of disputes such as order errors,” adding, “As market volatility intensifies, complaints and disputes related to forced liquidation may occur, so investors need to be cautious.”

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