Employees and executives at South Korea's 10 largest brokerages by equity capital traded more domestic stocks in the first seven months of this year than they did in all of last year, according to data released by a lawmaker.
Rep. Park Sung-hoon of the People Power Party, a member of the National Assembly's National Policy Committee, said on the 21st that staff at the top 10 brokerages traded a combined 16.6195 trillion won ($11.6 billion) worth of domestic shares from January through July. The figure exceeds last year's full-year total of 13.9106 trillion won by 2.7089 trillion won. Park obtained the data from the Financial Supervisory Service. The trading figure combines purchases and sales by employees and differs from net investment or holdings.
Meritz Securities (008560) recorded the largest amount at 2.9839 trillion won. Mirae Asset Securities (006800) followed with 2.7948 trillion won, Shinhan Securities (008670) with 2.078 trillion won, KB Securities with 2.0037 trillion won and Korea Investment & Securities with 1.8178 trillion won.
The pace of growth has accelerated in recent years. Domestic stock trading by staff at the 10 brokerages stood at 9.1411 trillion won in 2022, below the 10 trillion won mark, before surpassing 13 trillion won last year. At the current pace, the total could exceed 20 trillion won this year.
Overseas stock trading has also risen sharply. Trading totaled 2.0046 trillion won in 2022 but more than tripled to 6.2114 trillion won last year. Through July this year it reached 4.8369 trillion won and is expected to surpass last year's level.
Personal stock investment by brokerage employees is not illegal. But because financial industry workers can access investment research and client trading information in the course of their work, adequate internal controls are needed, Park said. With trading volumes rising quickly, existing systems designed to prevent the use of undisclosed information also warrant review, according to the lawmaker.
"Personal investment by brokerage employees should take place within permitted limits, but their standing as market professionals must not become a blind spot for internal controls," Park said. "Financial authorities should examine whether oversight systems for preventing conflicts of interest and unfair trading are working properly, in response to the increase in employee trading volumes."