Seoul — As of December 20, 2025, the Korea Exchange (KRX) is navigating a rare “three-front” shift: a liquidity surge in KOSDAQ, policy-driven market reforms aimed at narrowing the “Korea discount,” and a new era of trading competition as alternative venues reshape how Korean equities are bought and sold. [1]
Below is a comprehensive, news-style roundup of the latest KRX-linked developments, forecasts, and market analysis relevant for Google News and Discover readers on 20.12.2025.
What the Korea Exchange is — and why the world keeps bumping into it
The Korea Exchange (KRX) is South Korea’s primary market infrastructure operator: it runs the country’s major equity and derivatives venues, supports listing and market oversight functions, and publishes extensive market data that underpins everything from ETF creation to surveillance of unusual trading. [2]
That makes KRX more than a “place where stocks trade.” It’s closer to a national financial operating system: when liquidity shifts, when listing rules change, when volatility spikes, or when regulators tighten enforcement, the KRX is usually at the center of the blast radius.
The headline market story: KOSDAQ liquidity jumps — and retail leverage climbs with it
The most immediate KRX-linked storyline entering the weekend is KOSDAQ’s sharp pickup in trading heat.
KRX data cited in Korean financial coverage shows KOSDAQ daily transaction value hitting 13.4 trillion won on Dec. 19, the highest level in roughly four years (since mid-2021). December’s average daily transaction value also rose to levels described as the strongest in years. [3]
Just as notable as the volume is how it’s being financed. Reports tied to KRX figures also point to record-high margin/credit balances (a proxy for retail leverage), signaling that part of the KOSDAQ acceleration is being fueled not only by optimism, but by borrowing. [4]
What’s driving the KOSDAQ heat
The current KOSDAQ momentum is being linked to a familiar late-cycle cocktail:
- New listings that attract high first-week turnover
- Theme-stock rotations (fast-moving narratives pulling liquidity in bursts)
- Policy expectations that 2026 brings more institutional money into KOSDAQ [5]
A forecast now circulating: KOSDAQ’s next “psychological level”
One market forecast highlighted in local coverage suggests KOSDAQ could push toward ~1,100 in 2026, if policy measures succeed in pulling in longer-term capital and if risk appetite stays firm. That’s not a promise (markets don’t do promises), but it’s the kind of target that can become self-reinforcing in headlines and flows—until it isn’t. [6]
Policy catalyst: the FSC’s KOSDAQ “trust and innovation” plan for 2026
The most important policy development tied to the exchange is the government’s renewed focus on making KOSDAQ investable again for institutions, not just tradable for retail.
South Korea’s Financial Services Commission (FSC) has outlined a push for 2026 described as a plan to “boost trust and innovation” in the KOSDAQ market, including measures designed to change incentives for pensions and other large pools of money. [7]
Key elements reported include:
- Benchmark and system adjustments aimed at encouraging pension funds and other institutions to allocate more to KOSDAQ [8]
- Tax-related ideas and market-structure tweaks intended to support longer-term participation (rather than purely momentum-driven trading) [9]
- Expanded “tech special listing” coverage into areas such as AI, space, and energy, signaling a broader definition of what qualifies as “strategic innovation” in listing policy [10]
- Stronger exit mechanisms, including delisting-related improvements, to reduce the drag from chronically underperforming listings [11]
- Steps to strengthen the independence of the KOSDAQ-related function inside KRX, reflecting the view that KOSDAQ needs more tailored governance and oversight [12]
The big picture: regulators appear to be aiming for a KOSDAQ that can do two things at once—fund high-growth companies and still feel safe enough for conservative capital to participate.
Competition reshapes the playing field: KRX cuts trading fees to match Nextrade
A major KRX operational move already in motion: fee competition.
KRX announced a temporary reduction of stock trading fees by roughly 20–40%, running from Dec. 15, 2025 to Feb. 13, 2026. The reported baseline “flat” fee rate and the reduced rates differ by order type, with limit orders seeing the biggest cut. [13]
The stated strategic reason is hard to miss: the adjustment is meant to better align KRX pricing with South Korea’s first alternative trading system, Nextrade (NXT)—and to intensify competition on transaction costs. [14]
Why this matters beyond “a cheaper trade”
In a single-exchange world, fees are mostly an internal plumbing decision. In a multi-venue world, fees become a weapon.
South Korea’s move toward a competitive trading ecosystem was spelled out earlier by the FSC, which described the introduction of an ATS as part of capital-market infrastructure reform, with an expected extension of daily trading availability (via pre- and after-market sessions) and more diverse order types. [15]
A Korea Times report described the market transition as a “dual-market structure” for stock trading alongside KRX, with brokers facing best-execution responsibilities when routing orders. [16]
The near-term impact investors are watching
- Will liquidity fragment between venues or remain concentrated?
- Do spreads tighten (good) or does price discovery get messier (not good)?
- How quickly do brokers optimize routing behavior when fees, execution probability, and investor instructions collide? [17]
Market integrity moves to the foreground: crackdown politics meets exchange plumbing
“Korea discount” politics is now market structure policy
South Korea’s stock market surge in 2025 has been widely tied to corporate governance reforms and the political goal of narrowing the “Korea discount.” A Financial Times analysis described 2025 as one of the world’s strongest major equity-market performances, attributing much of the rally to governance reform momentum and the global AI trade. [18]
At the enforcement level, President Lee Jae Myung has publicly emphasized tougher action against manipulation and illicit trading, framing trust as central to valuation. In late-December remarks reported by Korea JoongAng Daily, Lee argued that lack of transparency and manipulation fears contribute to undervaluation and called for expanding joint enforcement capacity that includes KRX. [19]
Reuters has also reported earlier in 2025 that financial regulators and the bourse operator prepared measures to curb unfair trading practices, including illegal short-selling, after Lee ordered a “one-strike out” approach. [20]
The SK hynix episode shows how KRX surveillance tools can move megacaps
A concrete example of KRX’s market surveillance impact arrived this month: SK hynix fell after being designated an “investment warning” stock by the Korea Exchange’s surveillance committee. The designation tightened trading conditions—reportedly requiring 100% margin, restricting margin trading/credit loans, and even blocking trades on alternative trading systems while the warning is active. [21]
This triggered debate because the tool is often associated with overheating in smaller names, yet was applied to a mega-cap. Coverage noted that review for lifting the designation was scheduled to begin later in December, and that extreme post-warning price jumps could trigger a temporary trading halt. [22]
A separate Reuters-linked item carried by Investing.com also discussed KRX’s warning framework and the rationale tied to rapid price increases and concentrated trading activity. [23]
Interpretation: KRX is signaling that surveillance and “overheating” controls are not just for microcaps—they’re willing to use the brakes on the biggest vehicles too.
Duplicate listings and IPO policy: KRX moves toward clearer standards
One of the most structurally important stories for 2026 listings is KRX’s work on clearer standards for “overlapping” or “duplicate” listings—particularly parent/subsidiary structures that can trigger shareholder backlash and feed the “Korea discount” narrative.
A Maeil Business Newspaper (MK) report says KRX began preparing guidelines for overlapping listings, gathered feedback from securities-firm IPO practitioners in early December, and may disclose related content alongside upcoming KOSDAQ revitalization announcements. The same report expects rule revisions in Q1 2026 after broader 의견 수렴 (feedback) and FSC-related review. [24]
Korea JoongAng Daily has separately described how the Lee administration’s stance against duplicate listings is already influencing conglomerate IPO planning—and noted that the Financial Supervisory Service and Korea Exchange have signaled a tougher approach, with KRX considering guidelines for review. [25]
Why investors care: parent/sub listings often raise concerns that value is being extracted from one shareholder base to enrich another. If KRX creates predictable standards, it could reduce “surprise risk” in IPO pipelines—though stricter standards could also slow listings or force more shareholder-friendly deal structures.
System safety and disclosure upgrades: “trust” is being engineered, not just promised
Kill switch: a technical backstop with policy implications
KRX has also been reported as planning a “kill switch” system that would allow the exchange to cancel risky quotes that could trigger system failures, and halt trading under certain conditions. While the full details are not universally accessible across sources, the core intent is clear: harden the market against the kind of cascading technical errors that can undermine confidence in electronic trading. [26]
Disclosure rules: industrial accidents and ESG signals move closer to “price-relevant”
On the disclosure side, the FSC approved revisions connected to KRX disclosure rules requiring listed companies to timely disclose information on industrial accidents, alongside changes to ESG rating guidance so accidents are more systematically reflected in evaluations. The FSC noted KRX would compare and assess ESG rating institutions’ compliance with updated guidance. [27]
This matters because it’s a direct attempt to turn “soft trust” issues into “hard disclosure”—the kind of move that institutional investors tend to reward.
Global outreach and derivatives: KRX sells the “K-derivatives” story abroad
KRX’s strategic posture isn’t only domestic. In November, KRX reported participation in FIA Expo 2025 in Chicago to promote Korea’s derivatives market, citing growing global interest and pointing to reforms and the launch of an after-hours derivatives market earlier in 2025. The exchange also flagged that 2026 marks the 30th anniversary of Korea’s derivatives market. [28]
For KRX, derivatives are not just “extra products.” They are a way to keep Korea plugged into global risk management flows—especially when international investors want hedging tools that match their Korea exposure.
Macro overlay: a roaring equity market, but currency stress remains a live variable
Any Dec. 20, 2025 snapshot of KRX sits inside a bigger macro paradox:
- Equities have been strong in 2025, with major-market performance boosted by governance reform narratives and the AI cycle. [29]
- Meanwhile, the Korean won has faced notable weakness at points, pushing policymakers to take steps aimed at stabilizing FX conditions.
Reuters reported that the Bank of Korea announced measures to boost dollar supply in the onshore FX market amid won depreciation, and separately that a currency swap arrangement between the central bank and the National Pension Service was extended, partly to reduce pressure on the won linked to overseas investment flows. [30]
Why this matters for the exchange: FX volatility can influence foreign flows, hedging demand, and volatility regimes—each of which feeds directly into trading activity and price discovery on KRX.
Outlook for 2026: what to watch next for Korea Exchange
KRX’s near-term trajectory is likely to be defined by whether reforms translate into measurable changes rather than headline momentum.
1) Will KOSDAQ attract “slow money,” not just fast money?
If pension benchmarks, incentives, and listing reforms shift real allocations, KOSDAQ could become less of a momentum arcade and more of a durable capital formation venue. [31]
2) Fee competition vs. market quality
Lower trading fees can help liquidity, but competition also introduces fragmentation risk. The practical test will be execution quality—especially for retail orders routed across venues under best-execution frameworks. [32]
3) Clearer rules on overlapping listings
If KRX finalizes workable guidance, IPO structures could shift toward stronger shareholder protection—potentially supportive of valuations over time, but disruptive for some listing plans in the short run. [33]
4) Surveillance intensity stays high
The SK hynix warning shows KRX is willing to apply overheating controls even to the largest names, which may dampen extremes—but could also spark controversy when big stocks get “theme-stock treatment.” [34]
5) The “Korea discount” narrative remains a policy north star
With reforms framed as a route toward higher index levels (the political “Kospi 5000” idea), KRX is likely to remain a key implementation hub—through listing standards, disclosure regimes, and enforcement coordination. [35]
Bottom line
On Dec. 20, 2025, the Korea Exchange is not just reflecting market sentiment—it’s actively being reshaped by policy, competition, and a credibility campaign aimed at turning Korea’s equity story from “cheap for a reason” into “cheap no longer.”
If the KOSDAQ reform agenda lands, if fee competition improves execution rather than fragmenting liquidity, and if new listing and disclosure standards reduce governance risk, 2026 could be the year KRX’s plumbing upgrades become valuation upgrades. [36]
References
1. biz.chosun.com, 2. global.krx.co.kr, 3. biz.chosun.com, 4. biz.chosun.com, 5. biz.chosun.com, 6. biz.chosun.com, 7. biz.chosun.com, 8. biz.chosun.com, 9. biz.chosun.com, 10. biz.chosun.com, 11. biz.chosun.com, 12. biz.chosun.com, 13. m.alphabiz.co.kr, 14. m.alphabiz.co.kr, 15. www.fsc.go.kr, 16. www.koreatimes.co.kr, 17. www.fsc.go.kr, 18. www.ft.com, 19. koreajoongangdaily.joins.com, 20. www.reuters.com, 21. koreajoongangdaily.joins.com, 22. koreajoongangdaily.joins.com, 23. www.investing.com, 24. www.mk.co.kr, 25. koreajoongangdaily.joins.com, 26. biz.chosun.com, 27. www.fsc.go.kr, 28. koreajoongangdaily.joins.com, 29. www.ft.com, 30. www.reuters.com, 31. biz.chosun.com, 32. m.alphabiz.co.kr, 33. www.mk.co.kr, 34. koreajoongangdaily.joins.com, 35. www.ft.com, 36. biz.chosun.com
