Exchange Market Surveillance Committee Improves Summary Disciplinary Procedures to Protect Member Companies' Rights

[Asia Economy Reporter Minji Lee] The Korea Exchange Market Surveillance Committee announced on the 2nd that it has undertaken improvements to the simplified sanction procedures to protect the rights and interests of member firms.

As part of these improvements, the committee plans to strengthen the right of rebuttal for member firms during the imposition of simplified sanctions, adjust and actualize the differences between the KOSPI and KOSDAQ markets regarding 'non-disclosure of program trading quotes' among the subjects of simplified sanctions to ensure fairness, and establish effective measures to prevent recurrence for repeated violations of the same minor rules. Additionally, effective recurrence prevention measures will be put in place for repeated identical minor violations.

Regarding the provision of explanation procedures related to simplified sanctions, if a member firm requests, the committee will provide an opportunity to present opinions through formal sanction procedures, thereby enhancing the acceptability of sanctions. The simplified sanction notice will specify that member firms can request formal disciplinary procedures under the Market Surveillance Regulations according to their choice.

To actualize the standard amount for violations of program trading quote display, the committee plans to adjust the KOSDAQ market’s standard amount to reflect market conditions such as market size and program trading utilization, in line with the KOSPI and KOSDAQ markets. The KOSDAQ market’s standard amount, currently 15% of the KOSPI market’s, will be doubled to approximately 30%.

Regarding internal control evaluation grades for repeated violations, if the same violation occurs multiple times within a certain period, in addition to imposing simplified sanctions, the internal control evaluation grade will be downgraded.

The Market Surveillance Committee plans to revise the detailed enforcement rules of the Market Surveillance Regulations through collecting opinions from member firms and consultations with relevant departments. The committee stated, “While enhancing the rights and sanction acceptability of sanctioned member firms, the effectiveness of sanctions against member firms will also be strengthened,” and added, “The Exchange will continue to improve the system through steady communication with market participants including member firms to ensure fairness and transparency.”

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