Korea Securities Depository Launches 'Domestic Stock Fractional Trading Service'

[Asia Economy Reporter Minji Lee] The Korea Securities Depository announced on the 26th that it will launch the 'Domestic Stock Fractional Trading Service,' which allows trading of domestic listed stocks in fractional units.

Through this service, securities firms will aggregate investors' fractional purchase orders and cover the shortfall with their own assets to acquire whole shares, then entrust these shares to the Korea Securities Depository. The Depository will then issue multiple beneficiary certificates based on the entrusted shares.

There has been growing demand for the introduction of fractional trading of domestic stocks in the domestic stock market. Cases from foreign countries such as the United States, fractional trading services for overseas stocks, and the expansion of individual investors' participation in the stock market have further increased interest in fractional trading of domestic stocks.

Accordingly, the Financial Services Commission announced the 'Domestic and Overseas Fractional Stock Trading Allowance Plan' in September last year, and the Korea Securities Depository has been actively promoting the introduction of the domestic stock fractional trading service to support this policy. In February, together with securities firms, it was designated as an innovative financial service for the 'Domestic Stock Fractional Trading Service,' and after going through △ system analysis and design (Nov 2021?Feb 2022) △ system implementation (Feb?May 2022) △ unit, integration, and participant testing (Jun?Sep 2022), the domestic stock fractional trading support system was unveiled. Notably, during the system construction process, a working group for securities firms was operated (held 7 times in total) to actively reflect industry opinions, thereby enhancing the system's completeness, according to the Depository.

The Depository expects that the launch of the domestic stock fractional trading service will have an activation effect on the securities market, such as expanding investors' accessibility to the stock market. Investors will have improved access to blue-chip stocks due to the lowered minimum investment amount per stock, and they will be able to easily manage risk and build diverse portfolios with small-scale investments.

The Depository explained, "Investment by 'amount units' rather than 'share units' will become possible, allowing monthly fixed amounts to be used for stock investment similar to installment savings." It added, "Securities firms will provide various and innovative financial services such as amount-based stock trading and customized portfolio services according to investment amounts."

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