Nextrade Sets Fees 20-40% Lower than KRX
As Nextrade, the first alternative trading system (ATS) in Korea, is set to launch on the 4th, competition among securities firms over domestic stock trading fees is becoming fierce. Following Mirae Asset Securities, Kiwoom Securities, which has the largest number of retail customers, is also adjusting its fees, raising interest in whether the competitive trading environment will intensify for the first time in 70 years.
Nextrade has set its fees 20-40% lower than those of the Korea Exchange (KRX), prompting securities firms to lower their fees. Mirae Asset Securities will reduce its offline stock trading fee from 0.49% to 0.486% for branch-managed accounts and 0.14% to 0.136% for online trading. The firm stated, “With the introduction of ATS, we’ve adjusted the basic domestic stock fees and will separately levy related agency fees,” indicating that agency fees will differ between exchanges (KRX and Nextrade) and associations.
Kiwoom Securities plans to apply a stock trading fee of 0.0145% for transactions executed through Nextrade’s home trading systems (HTS) or mobile trading systems. The stock trading fee when trading through KRX remains unchanged at 0.015%.
KRX charges a transaction fee of 0.0023% of the trading amount. Nextrade plans to charge a lower fee: 0.0013% for maker orders (limit orders) and 0.0018% for taker orders (market orders). Some have expressed skepticism about the benefits to investors, arguing that even if Nextrade lowers its fees, the impact might be minimal unless securities firms adjust the fees charged to investors.
With multiple securities firms considering fee reductions, KRX might also consider lowering its fees. In addition to Mirae Asset Securities and Kiwoom Securities, other major firms like Shinhan Investment Corp. are reportedly reviewing fee reductions.
Kim Jun-woo, a researcher at Eugene Investment & Securities, predicted, “Nextrade, with its fees 20-40% lower than KRX’s settlement fees and new quoting types, will reduce trading costs for both investors and securities firms, weakening KRX’s 100% monopoly structure.”