An investor monitoring share prices on a smartphone. (Yonhap)
SEOUL, Sept. 14 (Korea Bizwire) — Starting from next year, retail investors will be able to buy blue-chip stocks costing tens of thousands of won per share in decimal points not only from foreign stock exchanges but also at domestic ones.
The Financial Services Commission (FSC), the nation’s top financial regulator, announced that it had designated decimal point trading for domestic stocks as an innovative financial service and will establish infrastructure to enable such trading for securities firms that can apply for it from next month.
Trading in decimal points refers to a change in the basic unit of stock trading from one share to dividing one share into multiple parts for trading.
For instance, investors will be able to buy parts of shares of LG Household & Health Care Ltd., a major cosmetics company which are currently priced at more than 1 million won per share, for as little as 3,000-5,000 won (US$2.56-4.26).
Decimal point trading for foreign stocks was designated as an innovative financial service back in 2019 and Shinhan Investment Corp. and Korea Investment & Securities Co. released related services.
The size of decimal point trading transacted through the two securities firms amounted to US$1.02 billion as of the end of June, higher than the level expected by the financial regulator.
“Interest in the decimal point trading service has increased in the domestic market,” the FSC said.
“We decided to review the revision of related legislation while operating the service on a trial basis for a certain period of time on the basis of opinions presented by the related industries.”
The decimal point trading system is based on trust. For instance, if investors buy a specific stock in decimal points, the securities firm making the purchase on their behalf should buy the remainder of the share.
J. S. Shin (js_shin@koreabizwire.com)
