KOREAN REPUBLIC: KRX Plans to Introduce Market Warning System

Thursday November 2 2023

On 31^st October 2023, Korea Exchange (KRX) planned to establish new investment warning criteria for stocks with gradual stock price increases over a long period of time.

If the stock price rises by more than 200% in one (1) year and the purchase participation rate considering the impact on the market price of the top 10 accounts is above a certain level, it is designated as an investment alert stock.

Considering that new unfair cases evade the unfair trading detection system using IP/MAC, if the purchase participation rate considering the impact on the market price of the top 10 buying accounts, rather than a specific account (group), is above a certain level, the new criteria designates such stock as an investment alert stock.

The introduction of this very-long-term unsound transaction criteria into the scope of market warning system intends to focus on a preventative measure against a new type of unfair transaction that seeks to evade the existing market surveillance system using a long-term upward trend in stock prices.

The introduction of new criteria is expected to contribute to investor protection by actively responding to more diverse unfair transactions by calling attention to stocks with a high probability of unfair transactions at an early stage.

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