Stock Trading Fees to Be Cut
By Yoon Ja-young
Staff Reporter
Stock trading fees are likely to be cut from next year.
At a workshop to advance state-run companies last Saturday, Lee Chang-ho, acting chairman of theKorea Exchange (KRX), the country's stock market operator, reported to Cheong Wa Dae that he would slash the stock trading fees the exchange levies on securities companies.
"We haven't decided yet how much, but we expect the cut early next year, at the latest," a spokesman at the KRX said.
The market expects it to be around 10 percent.
Currently, the bourse operator levies a 0.00446-percent trading fee on securities companies. When the KRX slashes this, brokerage houses will also have room to reduce the commission they levy on individual investors.
There has been fierce competition among securities companies to pull down commissions, with newcomers trying to attract customers to open accounts with them.
KRX earned 237.2 billion won in trading fees last year.
"We will have to cut down on other costs to slash trading fees," the spokesman said.
The Korea Institute of Finance has suggested that KRX and the Korea Securities Depository reform their stock trading commission systems. It recommended that each brokerage company should come up with their own commission scheme.
The bourse operator also reported to President Lee Myung-bak that it would cut salaries of employees. "We already agreed that with the labor union. We will follow other state-run financial companies to make it fair," the spokesman said.
The government recommended state-invested financial businesses to cut salaries of employees by 5 percent.
KRX is at the top in the ranking in salaries, with each employee making an average of 97 million won a year.
KRX, which is owned by securities companies, has been put under regular oversight by the government like other state-run enterprises as it was designated a public institution this year despite fierce opposition from its union.