Korea Exchange Improves Market Alert System... Filters Out Accounts Excessively Involved in Opening and Closing Prices

[Image source=Yonhap News]

[Asia Economy Reporter Myunghwan Lee] The Korea Exchange announced on the 18th that it will improve the investment warning and designation criteria for risky stocks under the Market Alert System.

The Exchange explained the reason for the improvement as "to strengthen the early market warning function for stocks with a high likelihood of price manipulation in response to recent changes in the investment environment and the diversification of unfair trading patterns."

With this improvement, the criteria for identifying unhealthy conditions within the Market Alert System will include opening and closing price standards. The Exchange added that this reflects the recent trend of increased price manipulation during the bid reception time for determining opening or closing prices.

The identification of linked account groups will also be strengthened. This measure reflects the recent trend where unhealthy trading patterns are conducted not by a single account but through multiple interconnected accounts.

The identification criteria related to day trading will be abolished. This is due to the increased prevalence of algorithmic trading and the generalization of short-term trading, which has reduced its significance.

An Exchange official stated, "This improvement of the Market Alert System focuses on reflecting unhealthy trading patterns indicative of price manipulation, considering changes in the market environment. By efficiently identifying stocks with a high likelihood of unfair trading at an early stage, it is expected to contribute to the prevention of unfair trading and the protection of investors."

The Exchange plans to complete the revision of the enforcement rules after a 20-day public consultation period and implement the changes starting from the 28th of next month.

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