The Korea Exchange (KRX) has decided to temporarily cut stock trading fees by 20% to 40%. It is a measure to respond to the rapid growth of NEXTRADE (NXT), which has approached the market share cap seven months after launch. Analysts say a full-fledged fee war has begun.
According to the financial investment industry on the 22nd, the exchange plans to lower fees from the current 0.0023% to 0.00134% for makers (limit orders) and 0.00182% for takers (market orders) from Dec. 15 to Feb. 13 next year. The related agenda item will be submitted to the exchange's board of directors on the 14th of next month.
With this cut, the exchange's fees will be the same level as NEXTRADE (NXT). The exchange's fees are already considered the lowest in the world, and cutting them further is unusual. Inside the exchange, there is reportedly growing anxiety that it cannot cede market leadership to the fast-growing alternative trading venue.
NEXTRADE (NXT) neared the market share cap under the Capital Markets Act (a six-month average of 15%) seven months after launch. As of June, its share soared to 19%. Longer trading hours and lower fee rates drew in orders.
As the likelihood of exceeding the limit grew, NEXTRADE (NXT) excluded 26 and 53 stocks from trading in August and September, respectively. Inside the exchange, there are concerns that without the cap regulation, the share would have surged to 20% to 30%.
An exchange official said, "The agenda related to the fee cut will be finalized after it is submitted to the board of directors."