As Korean investors' U.S. stock "weekly transaction" volume surged, the display of weekly quotes for major leveraged issues was suspended. Blue Ocean, an alternative trading system (ATS) used by Korean securities firms as a U.S. stock weekly transaction platform, said it took the step to comply with U.S. Securities and Exchange Commission (SEC) rules.
On the 1st, Blue Ocean notified Korean securities firms that, starting that day, it would suspend weekly quote provision for SOXL (Philadelphia Semiconductor Index 3x leverage), KORU (Korea Index 3x leverage), SNDU (SanDisk 2x leverage), and RAM (ETF DRAM 2x leverage).
Korea's securities industry set a policy to keep supporting limit-order trading itself by connecting to alternative trading systems other than Blue Ocean. The transaction function will remain, but because real-time weekly quotes from other alternative trading systems will not be displayed, investors will be forced to place so-called blind orders without seeing prices, causing expected inconvenience.
Korean securities firms currently offer a "weekly transaction" service through Blue Ocean, operating from 10 a.m. to 6 p.m. Korea time (9 a.m. to 5 p.m. during daylight saving time). But as Korean retail investors trading U.S. stocks concentrated weekly trading mainly in SOXL, Blue Ocean's share of trading volume appears to have exceeded SEC thresholds.
Under SEC rules, a particular alternative trading system cannot execute more than 5% of an individual issue's average daily trading volume for four of the prior six months.
In the end, it is seen that Blue Ocean's trading volume share exceeded SEC limits in leveraged issues that Korean retail investors trading U.S. stocks bought heavily.
According to Korea Securities Depository (KSD), Korean investors' U.S. stock transaction value rose 34%, from $48.9 billion in January to $65.6 billion in June. As U.S. stock transaction size grew sharply between May and June this year, Blue Ocean's total transaction amount also increased.