The long-standing monopoly of Korea Exchange (KRX) in the stock trading market has come to an end with the introduction of Nextrade (NXT), the country’s first alternative trading system (ATS). This development has sparked a mix of excitement and caution among investors like Kim, a 32-year-old office worker, who sees the ATS as an opportunity to engage in trading without being constrained by work commitments that might cause them to miss investment chances.

NXT’s debut on Tuesday marked a significant shift in the market dynamics, offering lower fees and a wider range of order types to enhance convenience for investors. The inaugural trading session saw a total of 213,983 shares exchanged in the main market, with transactions valued at 8.83 billion won ($6.06 million). Subsequent trading in the aftermarket continued actively, recording transactions worth 11.37 billion won.

While investors welcomed the increased options, there were also concerns raised about potential market volatility stemming from differences in trading hours and order types between NXT and KRX. This discrepancy could lead to varied stock prices and potentially enable institutional or foreign traders to engage in high-frequency trading, potentially disadvantaging retail investors.

Acknowledging these concerns, NXT CEO Kim Hak-soo reassured stakeholders that measures had been implemented to ensure market stability and prevent disruptions. Despite the apprehensions, the introduction of an alternative trading system is seen as a positive step towards revitalizing the Korean capital market and fostering sustainable growth.

The monopoly held by KRX since 1956 has been criticized for limiting service diversity, hindering infrastructure investment, and failing to meet the evolving demands for new financial products. In contrast, countries like the U.S., Japan, and Australia have embraced multiple ATS platforms that collectively hold a significant market share, providing investors with a broader array of trading options.

The NXT offers extended trading hours from 8 a.m. to 8 p.m., nearly doubling KRX’s trading window, and will gradually expand its list of tradable stocks to 800. Notably, popular companies such as Samsung Electronics and SK hynix will be available for trading on NXT starting March 24. However, the system is subject to regulations to prevent market manipulation and ensure fair trading practices.

In conclusion, the launch of Nextrade marks a significant milestone in Korea’s financial landscape, signaling a shift towards increased market competition, expanded trading opportunities, and enhanced investor experiences. As the ATS gains traction, it is essential to monitor its impact on market dynamics and investor behavior to ensure a fair and transparent trading environment.