▲ Korea Exchange
The Korea Exchange has decided to postpone the opening of the new securities market, which it had been preparing for fractional investment products.
According to industry sources on September 30, the Korea Exchange has decided to significantly delay the opening of the mock new securities market, which was scheduled to operate for six weeks starting from October 6 for system testing.
Consequently, the official launch schedule of the new securities market, previously announced for November 16, will also be pushed back.
The exchange explained that the decision took market conditions into consideration, stating that the specific launch schedule remains undecided.
Unlike conventional, standardized stocks or bonds, new-type securities are products that securitize non-standardized rights.
With the revision of the Electronic Securities Act allowing the issuance of token securities starting February next year, financial authorities have decided to pursue the tokenization and revitalization of trading for non-standardized and new-type securities, such as fractional investments, alongside standardized securities like stocks, bonds, and funds in a phased manner.
In the mock market, fractional investment products—where multiple investors invest in various assets or rights such as artwork, livestock, real estate, and copyrights—were scheduled to be traded in the form of new-type securities.
This postponement of the market opening is believed to be related to criticisms that the supply of related products may be insufficient.
The pilot operation of the new securities market was designated as an innovative financial service in December 2023, but its establishment was delayed at the time as well due to issues such as securing products.
Sim Su-bin, a researcher at Kiwoom Securities, noted in a report last month, "Looking past 2024, an overall slowdown in the supply of new products can be observed. In the case of real estate, which had the largest scale, platform operators successively announced the termination of their services in the first half of this year."
She added, "For artwork, it is somewhat burdensome to expand new public offerings. From 2024 through the second quarter of this year, at least two offerings have proceeded, but except for a few, subscription amounts have often fallen short of the target public offering amounts." She also pointed out that "while livestock fractional investment is stable, the small size of individual underlying assets and issuance scales limits market expansion."
The exchange explained, "We plan to provide supplementary distribution support at a time when the fractional investment market becomes revitalized and a large number of large-scale fractional investment securities emerge in the future."
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