 |
Photo courtesy of KB Securities |
[Alpha Biz= Paul Lee] KB Securities has been disciplined by the Korea Exchange (KRX) for executing excessive orders near the market close, which the exchange determined had influenced the formation of closing prices.
The KRX Market Oversight Commission announced on the 24th that, at its 13th meeting held on November 20, it issued a “member warning” to KB Securities for conduct deemed disruptive to fair trading—specifically, undue involvement in closing price formation.
An investigation found that a department within KB Securities placed several large-volume orders in certain stocks between 3:20 p.m. and 3:30 p.m., the single-price closing auction period, from late last year through March of this year. The commission concluded that the order sizes were excessive relative to the liquidity and market conditions of the affected stocks, potentially exerting undue influence on price levels and causing investor misunderstanding.
The commission also requested that KB Securities take internal disciplinary action against two employees involved by implementing “member self-regulatory measures.”
KB Securities stated that the trades were executed to unwind stock futures hedging positions that were set to expire on futures and options expiration dates, emphasizing that there was no intention to influence prices or engage in unfair trading. The firm said it will convene a disciplinary committee soon to determine whether to take action against its employees.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
