ABOUT KOFIA

Market Operation

The KSDA, KOFIA's predecessor, successfully launched the KOSDAQ index 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 is categorized into two divisions. The first division is called K-OTC Market. It is a market that facilitates transactions for unlisted corporations which submit annual reports or comply with the disclosure requirements set out by KOFIA. The second division is called the K-OTCBB, which is a trading platform that permits the transaction of all kinds of unlisted stocks, regardless of the company’s compliance with disclosure requirements. This division will open in March 2015.

Within the K-OTC market, along with companies that have registered to be listed, there are also companies - designated by KOFIA - that can be traded on the market. These are companies which submit annual reports through DART, the FSS’s reporting system, and a company is required to have conducted a public offering prior to designation. Several notable companies, such as Samsung SDS, Samsung Madison, and Hyundai Logistics, are classified as designated companies.

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

FreeBond

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. KOFIA posts the daily yields of 8 types of bonds and 51 closing yields. Among them, the 3-year and 5-year treasury bond yields are the benchmark indicators of the Korean financial market.

In October 2009, the FSC announced the "Plan for Improving the Secondary Bond Market," which focuses on the bond trading system. As a result of this, KOFIA has established and is operating FreeBond, an exclusive bond trading system. FreeBond, which consists of a messenger feature, a chat room, and a trading board, enables financial investment companies and related entities to exchange quotations for trading or brokerage and negotiate with counterparties in the OTC market. As of April 2011, 176 institutions and 1,463 individuals were registered with FreeBond, with 115 institutions and 685 individuals actively logging in to the system to use it. In the future, a complete bond ATS (alternative trading system), equipped with a settlement function, will be introduced.

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 in 8 categories, including Equity, Fixed Income, and Derivatives, which contain 28 primary and 106 secondary menu options. 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.
The new FreeSIS application for the iPhone was developed to enable users to access a variety of statistical data on a real-time basis. It provides 15 menu options listed under 9 categories, with each option featuring chart view functions, and other additional services, such as a FAQ, a push service, and a financial investment company headquarters/branch locator service.