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| Korea Exchange Chairman Sohn Byungdoo speaks during a press conference held at its Seoul office, Tuesday. Yonhap |
By Lee Min-hyung
The Korea Exchange pledged to root out any illegal and unfair trading practices by blocking violators' access to the local financial investment market for up to a decade, Sohn Byungdoo, head of the exchange, said Tuesday.
"We will thoroughly eradicate unfair trading practices by toughening rules against those caught for doing such acts," Sohn told reporters during a press conference. He admitted there was no legal basis for taking executive actions against any unfair trading practices, but added, "People engaging in unfair trading activities will be prohibited from creating new accounts and investing here for a maximum of 10 years."
The exchange operator also decided to streamline processes for monitoring naked short-selling. Presently, it takes more than a week for the exchange to uncover illegal trading practices. But this will be shortened to less than two days, according to the exchange. Naked short-selling refers to a trading act where investors sell stocks they don't own and haven't borrowed. It is illegal in Korea.
The Korea Exchange chief also promised to overcome local stocks' long-standing undervaluation against their global counterparts, frequently called the "Korea discount".
"We will help the local stock market achieve a major forward leap, and one of the top priorities toward the end is to build a trading environment that meets the global standard," Sohn said. "We will make a point of pushing for the revision of outdated dividend practices and mandating listed firms' English notifications to investors."
Under the drive, any KOSPI-listed firms with assets valued at more than 10 trillion won ($8 billion) will have to issue English-language notifications to investors starting next year. Listed firms with asset volumes exceeding 2 trillion won will also start following the same rule in 2026, according to the decision by the exchange.
On top of that, the exchange will also move forward the opening time of a derivative market here by 15 minutes to 8:45 a.m.
"If possible, most overnight market information abroad will be reflected in the derivative market before the opening of the stock market," he said. But it still remains to be seen when the drive will take effect.
The leader of the exchange also shared a rosy outlook for the local initial public offering (IPO) market for this year.
"IPO results remained weak in the main bourse due to unfavorable market conditions last year," he said. "But the outlook for this year doesn't seem as bad as last year's."
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