Last month, the launch of the country's first alternative trading system (ATS) opened the era of multiple stock exchanges, but investor dissatisfaction has grown due to frequent errors in securities firms' trading systems. Before the introduction of the ATS, securities firms requested more time from the financial authorities, citing a tight testing period. However, the authorities did not accept this request. The industry's inadequate preparation and the government's unilateral actions have ultimately led to investor harm.
As soon as trading began on March 4 for the country's first ATS, NextTrade (NXT), major securities firms' home trading systems (HTS) and mobile trading systems (MTS) experienced a flurry of small and large errors. On the launch day, errors such as delays in stock contract inquiries and real-time price inquiries occurred at Mirae Asset Securities and Kiwoom Securities. On the 19th of the same month, Toss Securities encountered a problem where information queries for overseas stocks were not properly conducted.
On the 18th of last month, not only securities firms but also the Korea Exchange trading system failed, resulting in the stock trading of the listed securities market being completely halted for about seven minutes. This was the first time since the launch of the exchange in 1956 that all trading of all stocks simultaneously came to a stop. This was also an error that occurred due to a conflict between the newly added 'mid-price bidding' method and the existing 'self-trading prevention condition bidding' introduced by the ATS.
In April, Kiwoom Securities experienced a series of delays in stock order executions. This error occurred over two consecutive days on the 3rd and 4th of this month. Ultimately, Kiwoom Securities had to suspend services throughout the weekend (April 5-6) for a major system check. Later, on the morning of the 18th, a system error at Mirae Asset Securities caused pre-market (Pre-Market·8 a.m. to 8:50 a.m.) trading to be suspended for 10 minutes.
The securities industry is in an atmosphere of concern that the expected situation has arisen. Previously, securities firms introduced the smart order routing (SOR) system to participate in the multiple trading market, but since this was the first time for all securities firms, no one could guarantee the SOR's normal operation. Consequently, earlier this year, some securities firms requested the financial authorities to extend the testing period for the ATS-related order system, expressing that more time was needed to find errors through repeated testing.
However, the authorities reportedly responded to securities firms saying they would proceed as scheduled. At that time, a senior official from the financial authorities noted, "(Securities firms) are exaggerating because they are anxious," adding, "The ATS system has been in place since 2013, and the preparation period has lasted 12 years." The official emphasized that the government had sufficiently allowed time for preparation, and the business operators had been diligently preparing.
As a result, securities firms did not complete their preparations perfectly within the given time, and the financial authorities did not heed the concerns of the operators who voiced worry about potential order mishaps. Consequently, the harm has fallen entirely on individual investors participating in the multiple stock trading system. One individual investor stated, "The gaps during which errors occur are too short, and it is unsettling," adding, "It seems that a capital market, which should be built on trust, is eroding its own trust."