As of Jan. 29, the Enterprise Management Committee of the Ministry of Strategy and Finance said the Korea Exchange (KRX) was no longer under its control.
Officials of the ministry said KRX is no longer considered a monopolistic company in the capital market under the revised Capital Market Law, and at same time no longer a firm listed for requiring a serious watch for loose management as it has satisfied all the conditions to be free from the special watch.
KRX, however, will be subject to supervision and control of the Financial Service Commission like any other financial entities in Korea, the officials said.
It has been six years since KRX was put under the scrutiny by the government and designated as a public firm. A KRX affiliate Koscom has also been freed from government control.
Chairman Choi Kyung-soo of the KRX said he feels a heavy responsibility now that KRX management autonomy has been expanded. KRX should become the 7th largest securities exchange in the world, the chairman said.
During the past six years, the KRX had its management supervised by the Ministry of Strategy and Finance, including its financial matters, which restricted its plans to expand operations by launching large projects. KRX officials expected that they will now be able to launch bigger projects overseas under the FSC, whose supervision would be more flexible in tune with the special nature of the financial industry.
From now on, the KRX will set up projects based on profitability and the suitability of operation, with the salaries of its officers and staff to be based on performance results. The KRX will also reorganize its operation now that it is freer.
At his New Year’s media conference, Chairman Choi said the KRX will strengthen its marketing by setting up two new units, the securities market headquarters and the derivative market headquarters.
The KRX will strengthen its plan to expand its overseas operations. It will globalize by reforming its systems, and at the same time, set up overseas operational bases through M&As and joint ventures abroad.
The KRX also plans to develop IT systems for exports. To expand its global market, the systems will be tailor-made for each different region of the world, such as East Europe, the Middle East and Latin America. It will also help the development of the IT securities market systems in such countries as Vietnam, Uzbekistan, Thailand and Cambodia that came from Korea. Also the KRX will back up the government projects for joint-venture securities markets in Cambodia and Laos. The development of IT systems takes time and is made possible with KRX being freed from government control.
Soon after being freed from government watch, the KRX issued a statement to the media saying it will invigorate the securities market by leading its globalization drive, and reform its management system.
Under the reform plan, the KRX will set up a marketing unit for each of the operation headquarters and slim the management support system to the extent that the KRX would be more profit-centered and business-oriented.
KRX officials said they will be able to improve the stock market authorities operation by keeping a close eye on departmental budgets, maintaining a restricted management system and monitoring profit and expense structures. They also said they will improve communication with customers to improve its image and practice the “sharing management” method by boosting social services region by region.
