Synopsis
South Korea's financial regulator has announced the upcoming launch of an alternative trading system in March, aimed at improving efficiency and convenience in the stock market, marking a significant shift in trading practices.Key Takeaways
- Nextrade (NXT) to launch in March.
- Operating hours: 8:00 a.m. - 8:00 p.m.
- Lower transaction fees compared to KRX.
- Short-selling allowed with restrictions.
- 32 brokerages and 800 companies expected to participate.
Seoul, Feb 5 (NationPress) The financial regulatory body of South Korea announced on Wednesday that a new alternative trading system will launch in March, aimed at enhancing efficiency and convenience in securities trading, signaling a significant transformation in the nation's stock market.
Currently, the Korea Exchange (KRX), established in 1956, serves as the sole national stock market operator.
The Financial Services Commission (FSC) revealed that the new secondary stock trading platform, named Nextrade (NXT), will operate for 12 hours daily from 8:00 a.m. to 8:00 p.m., extending beyond the current trading hours of 9:00 a.m. to 3:30 p.m. on the KRX, as reported by Yonhap news agency.
NXT will also feature lower fees compared to the main exchange and implement distinct stock bid and ask prices.
Short-selling will be permitted, though it will be prohibited during pre-market and after-market trading sessions, according to the FSC.
Additionally, the KRX's daily stock price limits and market stabilization tools, including a circuit breaker, will be applied on the NXT.
32 brokerage firms are set to participate in the NXT, which aims to list approximately 800 companies on the secondary exchange.
Meanwhile, South Korean stocks ended over 1 percent higher on Wednesday, following positive trends on Wall Street. The Korean won was also trading significantly stronger against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) rose by 27.58 points, or 1.11 percent, to close at 2,509.27.
Trading volume was robust at 429 million shares valued at 9.7 trillion won ($6.71 billion), with winners surpassing losers 589 to 300.
Institutions and foreign investors collectively purchased a net 99 billion won worth of local shares, while retail investors sold a net 197 billion won.
Overnight, Wall Street stocks gained due to reduced worries over trade after U.S. President Donald Trump decided to delay tariffs on Canada and Mexico for a month.
The S&P 500 rose by 0.72 percent, while the Dow Jones Industrial Average increased by 0.30 percent. The Nasdaq composite added 1.35 percent.
