Koscom says it will use smartTrade’s liquidity management system to offer aggregation and smart order routing services to help their clients connect to new alternative trading systems in Korea. Koscom is the Korean entity that was established by the Ministry of Finance and the Korea Stock Exchange in order to computerise the securities markets.
South Korea has been planning to permit alternative trading venues (ATSs) to compete with the Korean Exchange. Those plans stalled in 2012 as the rollout of a plan involving six of the largest Korean brokers and Credit Suisse met headwinds in the parliamentary approval process. The new rules are part of a series of proposed amendments to the Financial Investment Services and Capital Markets Act by the Financial Services Commission.
Assuming the Capital Market Consolidation Act passes the legislature, ATSs are expected to emerge soon thereafter, which will herald newly available liquidity, but also bring new technical challenges in areas such as smart order routing and aggregation.
According to Woo Joo Ha, the CEO and president of Koscom, the ultimate adoption of alternative trading systems will necessitate best execution. Therefore, he says Koscom opted for an open and scalable product which they will eventually be able to use to expand the technology to other asset classes.