Officers from Nextrade work on the firm headquarters in Seoul, Tuesday. Yonhap
Nextrade, which went into operation on Tuesday as Korea’s first different buying and selling system (ATS), is going through a collection of system errors, making some brokerage corporations hesitant to take part amid rising investor considerations, trade officers stated Sunday.
Nextrade initially deliberate to launch its common market, after-hours buying and selling market and block and basket buying and selling markets concurrently on Tuesday. Nevertheless, as of Sunday, the block and basket buying and selling market has remained non-operational.
Block and basket buying and selling entails a number of securities being traded collectively as a single bundle, a way usually utilized by hedge funds and institutional buyers.
The problem stems from a malfunction within the circuit breaker system, which is designed to halt buying and selling in phases if a inventory’s worth declines by greater than 8 % in comparison with the day gone by.
Previous to launch, Nextrade carried out a simulation and recognized that trades continued to be executed within the block and basket market even after the Korea Alternate’s circuit breaker was triggered. In consequence, the corporate determined to postpone its opening.
„The block and basket buying and selling market is primarily utilized by institutional buyers, so its impression on particular person merchants is predicted to be minimal,“ a Nextrade official stated. „We are going to reinforce the circuit breaker system and proceed with the market’s opening.“
This isn’t the primary time that system glitches have affected Nextrade’s providers. On the primary two days following its launch, some brokerage corporations skilled delays so as execution and market information retrieval.
„Shortly after the market opened on Wednesday, Kiwoom Securities‘ residence buying and selling system encountered quite a few minor glitches following its newest replace, making for a fairly unsettling begin to a day,“ an investor wrote to a web-based funding neighborhood.
„There have been many detailed errors associated to buying and selling, comparable to order e book lag, and real-time place calculations. Involved that these points might disrupt my purchase and promote orders, I opted to commerce cautiously on that day,“ he added.
Equally, at Mirae Asset Securities, real-time order execution updates on its cellular buying and selling system and residential buying and selling system have been delayed, forcing buyers to position duplicate orders.
The Monetary Supervisory Service is investigating the reason for system errors and assessing their impression on the affected securities corporations.
As ongoing errors increase considerations about system stability, securities corporations which have but to take part within the ATS are adopting a extra cautious stance. They’ve expressed intentions to enter the market in phases after confirming system stability.
At present, 14 securities corporations are participating in Nextrade buying and selling, together with Mirae Asset, Samsung, NH, KB, Kiwoom and Hana.
Some query whether or not the ATS was launched unexpectedly earlier than its infrastructure was absolutely ready.
„If you’ll introduce it, do it correctly. I consider Nextrade and securities corporations must strengthen their system stability for secure buying and selling,“ one other retail investor wrote.
