(C) Deco Journal

SEOUL – The Korea Exchange (KRX), South Korea’s sole stock market operator, announced a temporary reduction in its stock trading commission fees by 20% to 40%, effective today. This strategic move is widely interpreted as a direct response to the escalating market share of its Alternative Trading System (ATS) competitor, Nextrade.

The KRX is replacing its current unified transaction fee of 0.0023% with a tiered fee system, which will be applied provisionally from December 15, 2025, to February 13, 2026. This two-month window is critical, as any fee adjustments or exemptions exceeding three months require deliberation and approval from the Market Efficiency Committee under the Financial Services Commission (FSC). KRX is utilizing its internal authority for the swift, short-term implementation of the new fee structure.

Matching the Competition

The core motivation behind the KRX’s decision is to align its costs more closely with those offered by Nextrade, which launched in March. Nextrade's fee structure is already significantly lower, charging 0.00134% for limit orders (designated price) and 0.00182% for market orders.

“This temporary fee cut is a necessary measure to ensure competitive parity with Nextrade,” stated an industry observer, highlighting the fierce rivalry that has rapidly emerged in the Korean stock market.

Nextrade's Rapid Ascent and the '15% Rule'

Nextrade has seen a dramatic surge in trading volume since its inception. By the end of October, the ATS had exceeded the so-called "15% Rule," which limits its market share.

According to data compiled up to the end of October, Nextrade's average daily trading volume over the preceding six months (May 1 to October 31) reached approximately 216.81 million shares. This figure represents 15.66% of the KRX’s average daily trading volume of 1.38465 billion shares during the same period, signaling a pivotal moment as the new ATS crossed the regulatory threshold.

The increasing activity on Nextrade has been putting pressure on the KRX, the established heavyweight, to maintain its dominant position.

A Short-Term Battle

While the fee reduction is a clear competitive counter-move, its limited duration adds an element of uncertainty. The two-month trial period will serve as a crucial test to gauge the effectiveness of the lower fees in attracting trading volume back to the KRX.

Should the exchange wish to extend the reduced rates beyond February 13, it will have to formally seek approval from the financial authorities. Market analysts suggest that the KRX will closely monitor market share shifts during this period before deciding on a permanent or long-term fee strategy. This initial step marks the beginning of a potentially prolonged fee war that could ultimately benefit retail and institutional investors through lower transaction costs and increased market liquidity.