Fintech Industry “Let’s Introduce Expensive Stocks Split by One-hundredth of a Decimal Transaction”

Input 2021.03.04 16:27 | Revision 2021.03.04 18:54

The need to trade decimal points in domestic stocks that can split and sell expensive high-quality stocks is growing mainly in the financial investment industry. Experts believe that through decimal trading, individual investors can invest in high-quality stocks with a small amount of money.

On the 4th, CEO Ryu Young-jun of Kakao Pay emphasized the need for the so-called “decimal purchase of domestic stocks” at a discussion meeting for “Picking the No. 1 Stock for a Cup of Coffee” co-hosted by Democrats Lee Gwang-jae and Democratic Party lawmaker Lee Gwang-jae and Maeng Seong-gyu.

CEO Ryu said, “In order to encourage healthy investment, you have to invest in a portfolio method based on the concept of asset allocation, but you need a large amount of money.” “I present it as” he said. Representative Ryu is the president of the Korea Fintech Industry Association. At the debate on this day, Ryu was in charge of the keynote presentation, and Hyo-seop Lee, head of the Financial Industry Department of the Capital Market Research Institute, and Jeho Byeon, head of the Financial Services Commission’s Capital Markets, participated as debaters.

Decimal stock trading is a method in which the minimum unit of stock trading is lowered from one share to the decimal point, and the UK, leading the US, which has a large number of high-value stocks, has recently started offering minority trading for some stocks. You can buy stocks by amount, not by share. If a decimal transaction is introduced in domestic stocks, LG H&H’s stock, which is priced at 1.57,000 won per share based on the closing price the previous day, can be split into 0.01 stocks and purchased at 15,070 won. LG Chem shares, which cost 870,000 won, can also be bought for 8,700 won.

Domestic fintech securities companies, such as Kakao Pay Securities, are interested in buying and selling stock decimal points. CEO Ryu said, “In terms of price, if the barrier to entry is lowered through decimal transactions, it will be possible to form a new investment culture such as scrap investment.” Kakao Pay Securities began developing a mobile trading system (MTS) from the end of last year, showing interest in buying domestic stocks in decimal divisions. However, it has become unclear when the service will be released, as the FSC’s system improvement has not been slow.

Decimal point transactions are already being made for overseas stocks. In 2019, the Financial Services Commission designated decimal point trading services for overseas stocks as a special regulatory business, permitting the trading of foreign stock decimal points only for Shinhan Investment and Korea Investment Securities.

Accordingly, as the market demand to expand the stock trading at the decimal point to domestic stocks grew, the authorities said in August of last year, “We plan to review various business models to enable the purchase of minority stocks not only for overseas stocks but also for domestic stocks, and plan to devise a regulatory reorganization plan.” Said. At the time, the Financial Services Commission said that it would come up with a regulatory reform plan within the end of last year after collecting industry opinions for institutionalization, but institutionalization has been delayed.

The current commercial law and capital market law system that regulates the issuance and distribution of domestic stocks is designed for transactions with a minimum unit of one share. For this reason, stock market transactions and deposit infrastructure (infrastructure) are also operated so that it is impossible to process decimal transactions of less than one week.

Hyo-seop Lee, head of the Financial Industry Dept. of the Capital Market Research Institute, said, “In the introduction of domestic stock decimal trading, whether stock voting rights can be shared, whether minority stocks can be deposited, whether real-time decimal transactions are liquidated, and whether the transaction volume through decimal transactions can be handled are obstacles. Pointed out. At the same time, Lee suggested that “in the case of stock voting rights, a securities company can issue 10 equity securities based on one share.”

However, there is a problem that the number of shareholders expected from a company’s point of view may be exceeded if a decimal transaction is made. This is because the shareholders of companies that issue 1,000 shares can increase by more than 10,000 through decimal transactions.

Nevertheless, the government has expressed its position to resolve it as soon as possible. Byeon Je-ho said, “With regard to decimal trading, it will be as convenient to investors as possible by making a technically safe transaction system and absorbing it into a general system, or by adding system improvement to the current decimal trading method for overseas stocks. We are thinking about the direction we can do.”

Rep. Lee Kwang-jae said, “If it is not possible to launch a service quickly, we hope that we will be able to provide the service first through innovative financial services, even within the extent that investor protection is not impaired.”