Korea has marked a significant milestone in its financial landscape with the launch of Nextrade, the country’s first alternative stock exchange, breaking the nearly seven-decade monopoly held by the Korea Exchange (KRX). Nextrade, initiated by a collaborative effort of 34 securities and technology firms in November 2022, officially commenced operations on Tuesday after securing final regulatory approval in February.

One of the distinctive features of Nextrade is its extended trading hours, offering a 12-hour trading window that surpasses the conventional market hours. This flexibility allows investors to engage in trading activities during early mornings and evenings, catering to diverse trading preferences. Moreover, Nextrade boasts lower commission fees compared to KRX, with a reduction of 20-40%, aiming to incentivize trading activity. To encourage participation, Nextrade has announced a waiver on all commission fees until the end of April.

Despite its advantages, Nextrade currently presents a limited selection of stocks for trading during its initial phase. Initially, only 10 stocks are available, including prominent names like Lotte Shopping, LG Uplus, and YG Entertainment. However, plans are in place to gradually expand the offerings, with a projected increase to 110 stocks by March 17, reaching a total of 800 stocks by March 31, encompassing major players such as Samsung Electronics and Hyundai Motor.

Investors now have the option to choose between KRX and Nextrade during overlapping trading hours, considering factors such as fees, trading speed, and bid prices. Notably, Nextrade operates from 8 a.m. to 8 p.m., with premarket and aftermarket sessions flanking the regular trading hours. Brokerage firms play a crucial role in executing trades on behalf of investors, ensuring the best execution based on pricing and stability through the Smart Order Routing system.

The introduction of Nextrade has elicited a positive response from major brokerage firms, with 14 leading firms supporting trading on the new exchange throughout the day. Additionally, mid-sized brokerage firms are gradually integrating Nextrade into their operations, offering trading services during premarket and aftermarket hours. This strategic move aims to enhance market competition, foster innovation, and cater to the evolving needs of the local capital market.

In conclusion, the emergence of Nextrade as Korea’s first alternative stock exchange signifies a pivotal shift in the financial landscape, challenging the long-standing monopoly of the Korea Exchange and ushering in a new era of trading opportunities and market dynamics. With its innovative approach, extended trading hours, and competitive fee structures, Nextrade is poised to reshape the capital market ecosystem, offering investors a diversified and dynamic trading platform.