"Black Monday" system chaos halted weekday trading of overseas stocks for more than a year, and it will resume on the 4th.
According to the financial investment industry, 18 major domestic securities firms will offer weekday trading services for overseas stocks starting that day. It is a system that allows domestic investors to trade U.S. stocks from 9 a.m. to 5 p.m., during Korea's daytime hours. The restart comes after about 1 year and 2 months.
Weekday trading of overseas stocks was suspended after Aug. 5 last year, when global markets were volatile on "Black Monday" and Blue Ocean, the U.S. alternative trading system (ATS) that held a monopoly on weekday trading processing in Korea, unilaterally canceled received orders. The industry, considering concerns about a recurrence, simultaneously suspended the service starting on the 16th of the same month.
Accordingly, for this resumption, as an investor protection measure, firms decided to sign multiple contracts not only with Blue Ocean but also with other new U.S. ATSs, "Bruce" and "Moon," to secure backup venues. Blue Ocean has also introduced a new system to improve processing speed and transaction capacity. In addition, securities firms were required to have two or more U.S. local brokers, designated as main and backup.
In addition, each securities firm decided to build a "rollback system" that cancels a transaction and restores an investor's balance as quickly as possible if a transaction error occurs.
They also strengthened advance investor guidance on weekday trading risks such as potential liquidity shortages or price distortions, and required clear compensation standards and procedures when investors incur losses due to a securities firm's own system error. Each securities firm was further required to develop response manuals by detailing scenarios for each type of failure.