Korea Exchange to impose sanctions on Merrill Lynch for alleged market disturbance
Korea Exchange to impose sanctions on Merrill Lynch for alleged market disturbance
  • Jung Se-jin
  • 승인 2019.06.13 12:51
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'It serves as a channel for Citadel Securities' high frequency trading'

The Korea Exchange is seeking to impose sanctions on Merrill Lynch, a brokerage house, for allegedly engaging in market disturbances through high frequency trading on the local stock market.

The Korea Exchange said on June 11 that it will hold a market monitoring committee meeting this month to discuss the proposed sanctions against Merrill Lynch. 

Earlier, the exchange held a meeting of its discipline committee and decided to present to the market watchdog a plan to impose sanctions on Merrill Lynch, such as sanctions or warnings.

Merrill Lynch is known to have served as a channel for the high frequency trading of Citadel Securities.
The exchange is looking into whether the Citadel Securities' high frequency trading constitutes "an act of submitting or making asking prices that could cause undue influence on the market price or cause misunderstanding in light of the market supply situation of certain stocks" of the Article 4 of the exchange's market monitoring regulation.

The exchange is considering notifying Citadel Securities to the Financial Services Commission on charges of market disruption under the Capital Market Act.

"Details of the sanctions have yet to be decided, and the decision will be made by holding a market monitoring committee," an official at the bourse operator said.

The high frequency trading through the Merrill Lynch window took place on a large scale last year, prompting individual investors to file a petition on the bulletin board of the presidential office Cheong Wa Dae, asking for punishment on Merrill Lynch's conduct of market disturbances.

Meanwhile, a Citadel Securities official said, “As a leading global market participant, Citadel Securities has a long history of working with regulators around the world to promote fair, stable, and competitive markets that benefit all investors, and we are committed to working with Korean officials on this, or any other matter.”


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