ABOUT KOFIA

Market Operation

The KSDA, KOFIA's predecessor, successfully launched the KOSDAQ in 1996 and turned it into one of the most successful new markets in the world. KOSDAQ, the Korean version of NASDAQ, was successfully overseen by the association until it merged with the Korea Exchange (KRX) in 2005. Building on those successful experiences, KOFIA established the K-OTC and operates the OTC Bond Market.

K-OTC

Starting in July 2005, KOFIA began managing FreeBoard, a systematized over-the-counter (OTC) market. FreeBoard provided a place for companies unable to meet the listing requirements of the two national securities exchanges to trade their stocks, and acted as a financing channel, particularly for venture companies and SMEs. However, after KONEX, a listed market reserved for SMEs, was opened by KRX in July of 2013, FreeBoard’s role within Korea’s capital market became redundant. Thus, the FSC and KOFIA redefined the role of KOFIA’s OTC market as an infrastructure that promotes transparent and smooth unlisted stock transactions, and changed its name to K-OTC.

The K-OTC market operated by KOFIA consists of K-OTC, K-OTCBB and the K-OTC PRO. The K-OTC Market is an institutional and systemized OTC platform established and operated by KOFIA pursuant to the FSCMA. Investors can trade the stocks of unlisted companies which have been either registered with at the request of the companies or designated by KOFIA, with the help of securities firms. Several notable companies, such as POSCO E&C, SK E&C, Samsung Medison, are classified as designated companies.

K-OTCBB is a bulletin board that permits the trading of unlisted stocks including those that are traded on neither the Korea Exchange nor the K-OTC market, as long as the company meets minimum requirements. Investors may trade on K-OTCBB through negotiations between securities firms. K-OTC PRO is a members-only trading platform introduced and operated by KOFIA to support the financing of unlisted companies and smooth transactions of unlisted stocks for institutional and professional investors. Investors can take part in various ways such as by negotiation, bidding and auction to trade unlisted stocks.

More information on the K-OTC can be found at www.k-otc.or.kr.

K-Bond

KOFIA plays an important role in ensuring the transparency and efficiency of the OTC fixed income market by collecting and disseminating vital trading data. KOFIA runs the Bond Quotation System, which displays bid and ask quotations in real time to aid bond traders in their transactions. KOFIA also provides many other types of bond-related data. All bond transactions must be reported to KOFIA within 15 minutes of the transaction.

In October 2009, the FSC announced plans to revamp the secondary market for bonds, which focuses on the introduction of a centralized bond trading system, and KOFIA subsequently established and launched Freebond. Since then, as the market participants increased, the number of users in Freebond increased by more than twice, the demand for the system improvement also increased. In September 2017, KOFIA developed the K-Bond, which improved the performance of the Freebond system. As of June 2019, 344 institutions and 7,960 individuals were registered with K-Bond.

K-Bond is a professional system customized for bond trading. Security-wise, it is fully immune to external hacking risks, as all conversations and quotation information are encrypted. Confidence is built up among trading parties as KOFIA thoroughly checks and manages the qualifications of all K-Bond users. One of the most discernible qualities of K-Bond is its ability to tailor to each of the various needs and demands of market participants. This is made possible because it is run by KOFIA, which is in a position to engage in constant communication with interested parties.

Data Management System

FreeSIS

FreeSIS receives statistical data from the capital market and the financial investment industry and makes it all available in one place. The system provides access to industry statistics, including Equity, Fixed Income, and Derivatives market data. It also offers a variety of sophisticated options for viewing data, including daily and monthly gain/loss, the ability to search statistics for highest/lowest values, correlated data searching, multi-axis chart, and more, to promote more effective usage of statistical data.

Several enhanced analysis tools, such as Statistics at a Glance, Cross-statistics, and Event Statistics are available for analysis and other marketing needs. Members can use standard templates for data submission, and most data can also be submitted through automated submission processes rather than manually, thereby reducing time spent submitting information and improving efficiency.