8.8 Million KRW Transaction with 550,000 KRW Fee?…FSS Advises "Be Aware of Risks in Overseas Stock Investment"

Check Payment Systems and Costs by Country

#Mr. A, who was trading stocks listed on the London Stock Exchange through a certain securities firm, was taken aback after receiving the commission fee following a transaction. The total amount of buying and selling was 8.85 million KRW, but the commission alone was 550,000 KRW. This is because the UK imposes a minimum commission fee per transaction regardless of quantity or amount. Mr. A, who expected a profit after buying stocks worth 5.65 million KRW and selling stocks worth 3.2 million KRW, filed a complaint, but the Financial Supervisory Service dismissed it, stating that the minimum commission fee application countries are clearly indicated in the order window precautions.

#Mr. B, who was trading stocks listed on the New York Stock Exchange, placed a market sell order, but the trade was not executed. This was due to a 'trade halt' that suspends trading for 5 minutes when the stock price fluctuates sharply. After trading resumed, Mr. B's order was executed at a lower price than the initial order. Mr. B filed a complaint, but it was not accepted as it was a normal trade according to the NYSE operating method.

As complaints from 'Seohak Ants' have increased due to the various variables such as order execution time and trading costs by country in overseas stocks, the Financial Supervisory Service issued a consumer alert on the 17th, advising caution regarding investment risks and trading commissions when investing in overseas stocks. Since 2020, overseas stock investment has significantly increased, especially among individual investors, with foreign currency securities settlement amounts recording $323.4 billion in 2020, $490.7 billion in 2021, and $375.5 billion last year.

The Financial Supervisory Service urged investors to fully understand the risks and the scope of responsibility of securities firms stated in the foreign currency securities trading account terms and conditions and to enter into contracts carefully, as unexpected risks such as settlement delays may occur when investing in overseas stocks. They also requested attention to the fact that even if overseas stock items with rights such as stock dividends, stock splits, or stock consolidations are traded on local exchanges, reflecting these rights domestically may take time, which could restrict trading.

The Financial Supervisory Service pointed out that overseas stock trading commissions may vary by securities firm and country due to differences in costs incurred for order execution, and that some countries may impose a minimum commission fee per transaction.

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