SEOUL, Jan. 24 (Korea Bizwire) – South Korea’s stock market operator said Thursday it will push to introduce a rule that allows it to cancel mistakenly made share trading orders as part of efforts to better guarantee market stability and protect investors.
Lee Eun-tae, chief of the KOSPI market division under the Korea Exchange (KRX), presented the plan as one of its key business goals for this year during a press briefing in Seoul.
“Under the envisioned rule, the KRX will have the authority to cancel faulty orders that are feared will have a major impact on the market,” Lee said.
Such a power is deemed necessary as mistakes in stock transactions could cause massive losses to investors and hurt the credibility of the country’s equities market, he stressed.
In April last year, the fat-finger fiasco involving Samsung Securities Co. jolted the market. An official of the major brokerage firm mistakenly paid 112 trillion won (US$99.29 billion) worth of stocks to its employees as dividends and 16 employees sold off a combined 5.01 million ghost shares, causing huge losses to investors.
“After gathering opinions from experts and officials concerned, we plan to introduce the measure around the end of this year,” the chief noted.
In order to encourage more firms to go public, the KRX vowed to push for an easing of listing-related rules.
“We will strive to enable firms to sell their shares if they meet the market capitalization criteria, even if they fail to satisfy other financial conditions,” Lee said, pointing to cases where it would take time before making tangible profits from research and development or large-scale investment.
Diverse marketing campaigns will be made to promote the initial public offerings (IPOs) of big business entities, the operator noted.
Several market kingpins are seeking to launch IPOs on the main KOSPI bourse, including major refiner Hyundai Oil Bank Co. and Kyobo Life Insurance Co. Taken together, the market is projected to reach 5 trillion won this year, according to the KRX.
Last year, the KOSPI bourse saw nine newcomers whose aggregate value came to 900 billion won, down from the 4.4 trillion won logged for new KOSPI-listed firms the previous year.
“By actively supporting the IPOs of big firms and improving conditions regarding corporate listings, we aim to reinvigorate the capital market this year,” Lee said.
In 2018, the KOSPI index fell 17.3 percent amid concerns over global trade frictions and signs of an economic slowdown.