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| Korean Stock Market was opened its market in 1956 with 12 listed companies. During its early years,
Korean Stock Market was more of a government bond market, and the level of stock trading was insignificant.
It also experienced a series of market crashes, resulting of market closing and reorganization of its Stock Market Division.
Since mid 1960s, however, Korean Stock Market grew rapidly, owing to a series of government actions aimed
to develop a capital market, which could support the national economic development plans, and to encourage privately-owned
companies to go public. Examples of the important legislations enacted for these purposes are the Securities and Exchange Act of 1962,
the law on Fostering the Capital Market of 1968 and the Public Corporation Inducement Act of 1973. |
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| In order to manage rapidly growing market, effectively Stock exchange made concerted efforts in improving
its trading systems and building market infrastructure. It introduced the regular-way transaction in 1969 and the
continuous trading in 1975. The order-routing system was automated in 1983, thus enabling member firms to electronically transmit orders
to the trading floor for the efficient system, beginning from 1988. The trading system was full automated in 1997 and the exchange began to operate its market without the trading floor. |
| For the efficient trade settlement, the Korea Securities Depository (KSD) was established in 1974,
and the Korea Securities Computer Corporation (KOSCOM) in 1977 to facilitate the computerization of the securities industry.
With the growing business, the physical expansion was necessary and the Exchange was moved into the present location
in Yoido, thus creating Yoido as a Korean version of “ Wall Street”. |
| Since early 1980s,the Korean stock market was gradually open to foreign investors.
As the first step, international investment trusts and country funds such as the Korea Fund were launched,
thus allowing foreigners to make indirect portfolio investment, In 1992, the Korean stock market was opened to
foreign investors with certain restrictions, and the foreign share ownership restrictions were gradually lifted
and were fully eliminated in 1998. Additionally, the membership for the Korean Market was opened to foreign securities companies. |
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| The Stock Market Division undertake various measures that ensure the establishment of fair market price and protection of investors.
For instance, by listing stocks of corporations with the growth potentials, credibility and profitability, the investor risks are minimized
and the corporate disclosures, which provide information necessary for the investment decisions, are made available through the electronic
disclosure system that can be accessed by investors, both in Korea and else where, on Internet. To build a reliable and transparent market,
the Stock Market Division monitors stocks price movements and investigates abnormal trading through the up-to-dated consolidated surveillance system.
The Stock Market Division also has taken up a leading role in improving corporate governance practices in Korea. |
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| After the financial crisis in 1997/8, the Korean securities market implemented a broad range of market reforms,
with the special attention to the strengthening market infrastructure, accelerating deregulation, and enhancing investor protection
and market efficiency. The Stock Market Division gives a special importance to international cooperation, thus promoting a long-term cooperation
and collaboration among the exchanges of the world, and in order to respond to the globalization and requirements of post-industrial information
society, the Stock Market Division continues to upgrade its computer systems with the latest information technology. Furthermore, to enhance the
market transparency and fairness, the surveillance system, which integrates both the cash and derivatives markets, is established and the
investigation of unfair trading in cyber sphere is intersilified. Efforts are underway to facilitate the listing or Korean companies on the
foreign exchanges and the listings of foreign exchanges on Korean exchange, thus reducing the market entry barriers, and to harmonize the rules
and regulations, including the trading and settlement systems, with global standards. |
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