The Market Oversight Committee of the Korea Exchange (KRX) said it will overhaul its reporting and reward system, including an expansion of small rewards, to encourage the reporting of unfair trading such as price manipulation and the use of undisclosed information, with the changes taking effect Saturday.
Under the Capital Markets Act, unfair trading refers to price manipulation, the use of undisclosed information, and fraudulent transactions. The exchange will pay small rewards at a stage prior to general rewards when a report is deemed to have contributed to the prevention of unfair trading or to market surveillance work.
The small reward cap will be raised by 50%, from the previous 6 million won to 9 million won. Eligible cases include those in which the exchange requests preventive measures, requests or initiates examination or audit related to the report, or where reported online activity carries the likelihood of unfair trading.
Small rewards are paid more quickly than general rewards. General rewards are paid after the examination results of a report are notified to the supervisory authority, or after decisions such as a criminal referral by the Securities and Futures Commission, notification to investigative agencies, or the imposition of fines. By contrast, small rewards can be paid before the suspected violation is finally proven, based on the contribution to market surveillance.
Participants in unfair trading are also included among reward recipients. However,...
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