Nextrade prepares for alternative trading system launch with 21 brokerage firms

Seoul's financial district in Yeouido / gettyimagesbank

A total of 21 brokerage firms have declared their intentions to participate in the alternative trading system (ATS) market expected to launch in the first quarter of 2025, Nextrade announced Sunday.

According to Nextrade, which will be operating the ATS, 19 shareholder firms have signaled their intent to join the ATS market as of March. These include Kyobo, Daishin, Mirae Asset, Samsung, Sangsangin, Shinhan, Yuanta, eBest, Kiwoom, Hana, Hi Investment, Korea Investment, Hanwha, BNK, DB, IBK, KB, NH Investment and SK Securities.

Additionally, among non-shareholder securities firms, Morgan Stanley and Toss Securities have also indicated their willingness to participate.

The participating firms' combined market shares in stock brokerage stand at approximately 89 percent.

Nextrade will continue to provide opportunities for securities firms that have not yet expressed their intentions to participate.

"We have once again confirmed the high interests and expectations of brokerage firms by receiving a letter of intention to participate," Nextrade CEO Kim Hak-soo said. "We are committed to launching the new market by the first quarter of 2025 through the establishment of transaction systems and networks."

Nextrade plans to offer four specialized services: flexible trading hours, lower fees, a variety of order methods, and quick order execution and settlement, according to Kim.

The company is also developing smart order routing with various brokerage firms. It is an automated process utilized in online trading for enhanced efficiency.

The Korea Financial Investment Association has been advocating for the ATS market for years, beginning with the establishment of a legal foundation in the Capital Market Acts in August 2013. In November 2022, 34 related institutions, including major brokerage firms, came together to establish Nextrade, a corporation set up to prepare for the ATS launch. It then received preliminary approval from the Financial Services Commission last July.

The initiation of Nextrade has fueled optimism, suggesting it could become a game-changer in a stock trading market dominated by the Korea Exchange for decades.

"The involvement of the 21 securities firms signifies their support for the stable establishment of multiple trading platforms. This move is significant for invigorating the domestic stock market and offering new services, like extended trading hours, to a broad spectrum of investors," a Nextrade official said.