최선집행의무; 최선집행기준; 다자간매매체결회사; Regulation NMS; MiFID; 고빈도거래; flash order; best execution obligation; best execution standards; Multilateral Trading Company; HFT
상사법연구. 32(3), pp. 67-102 (36 pages)
The amendments to the Capital Markets Act proclaimed on May 28, 2013(the “2013 amendments”) newly introduced the Alternative Trading System (“ATS”) in the name of “Multilateral Trading Company.” With the introduction of the Multilateral Trading Company, the 2013 amendments also permitted anyone who meets the certain requirements under the Capital Markets Act to establish an exchange. Those two changes opened the era of multiple trading venues and put an end to the 57-year old monopoly of the Korea Exchange (“KRX”). As investors flock to multiple trading venues, the same stock can be traded simultaneously at different prices in each marketplace. This fragmentation of order flow raises a new challenge for regulators. From an individual investor's standpoint, monitoring whether a broker has secured the best possible execution for each order will be particularly cumbersome if more marketplaces offer various prices for various order sizes in parallel. In response to this concern, the 2013 amendments introduced the new “best execution” principle. Under this principle, an financial investment entity owes a duty to compare trading conditions of different markets and then ensure that orders are executed at the best interest of the investors. Although the best execution principles of many countries have similar backgrounds, the specific definition of “best” varies across the nations. United States and European Union, the two most important jurisdictions for equity trading, follows diametrically opposed approaches in practice. The best execution principle under the Capital Markets Act has to provide fair trading opportunities and best execution results to diverse investors.