KRX lifted from public corporation status

By Yoon Ja-young

The Korea Exchange (KRX), the country’s stock market operator, was removed from public corporation status, Thursday, meaning it will be free from government intervention.

This is expected to accelerate its overseas business plans.

The Public Institution Management Board under the Ministry of Strategy and Finance announced a list of public agencies which come under tight governmental control in terms of budget and human resources.

Twenty new organizations including the Korea Institute for Food Safety Management Accreditation were place on the 2015 list, while six were removed.

Though the KRX is owned by securities companies, it was designated as a public agency in 2009 due to its monopolistic status and lax management. It paid more than 13 million won in annual welfare benefits per employee in 2013, the highest among public institutions, on top of a 113 million won salary.

The KRX has made efforts to be delisted, cutting welfare benefits by 68.6 percent last year. It also avoided the monopoly issue with the revision of the Capital Market Act, following which the establishment of another bourse operator is allowed.

“Considering that there has been criticism regarding lax management, the KRX was delisted only on the condition that it would be controlled and supervised by the Financial Services Commission (FSC),” the board announced.

The KRX changed its corporate articles to allow the FSC to review its management.

It is planning to pursue growth engines overseas from the long-term perspective. Previously, it couldn’t do this as it had to focus on short-term achievements to get a positive evaluation from the finance ministry that evaluates public institutions each year. The KRX is especially interested in exporting its IT system.

It may also seek to get listed on the bourse, in which case securities companies that have shares in the KRX will benefit. Currently, NH Investment and Securities has the biggest stake of 7.46 percent.