KRX seeks to lead Asia's market oversight efforts

By Oh Seok-min SEOUL, Feb. 1 (Yonhap) -- South Korea will move to take the lead in building a cooperative channel in Asia to effectively oversee unfair trading practices in stock markets and to enhance market soundness, a senior official of the local bourse operator said Monday. "We are striving to establish a joint consultative body with Asian peers that will be in charge of overseeing the regional stock market," Lee Hae-sun, chief of the Market Oversight Commission of the Korea Exchange, said in an interview with Yonhap News Agency. "The envisioned entity will help lay the groundwork for a cooperative mechanism to tackle unfair transactions in the region," he said, adding detailed discussions will be made during an upcoming seminar slated for July in Seoul. Last year, South Korea called for holding such a forum during the Intermarket Surveillance Group (ISG) meeting, and bourse operators of nine Asian countries, including China, Japan, Singapore and Taiwan, have expressed their intention to come to Seoul for the seminar. As the self-regulatory body established in 1981, the ISG is comprised of an international group of exchanges and market regulators, which perform market surveillance in their respective jurisdictions. It aims to detect and prevent unfair transactions by sharing market information among its 53 members, including South Korea, the United States, Britain, and Japan. The KRX has enhanced its global position in recent years. In 2015, the total value of the local stock market ranked 14th among major bourses in the world and was the fourth biggest among Asian peers. Lee also vowed to set up a task force involving officials and market experts this month as part of efforts to take pre-emptive measures against transactions that circumvent the law. "Building a close network with experts and analyzing a variety of trading practices is required to prevent market turmoil in these fast changing times and to give precise information to traders to foster investment," he said, pointing to a growing number of cases of illegal trading via the social trading system. In 2015, the commission pre-emptively detected 36,772 cases of unfair deals, up 32.2 percent from the previous year. According to a separate tally by the Financial Supervisory Service, unfair trading cases in the local stock and derivatives markets reached 82 in the first half of last year, up from 60 the previous year. Noting that the local market is forecast to go bearish, Lee vowed to keep a close tab on market movements further to detect and deter possible violations of trading rules in a swift fashion. "It is crucial to detect unfair trading practices after they are committed," he said. "But what is more important is to set up an oversight system that can help prevent them." graceoh@yna.co.kr (END)