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[Alpha Biz=(Chicago) Reporter Paul Lee] Citadel Securities was fined tens of billions of won for "high frequency trading" on the KOSDAQ market from 2017 to 2018. This is the first case for market disturbance through the sale of high-frequency algorithms.
The Securities and Futures Commission under the Financial Services Commission said on the 26th that it judged the sale of high-frequency algorithms by overseas securities firm A as a market order disorder and decided to impose a fine of 11.88 billion won. According to financial authorities, A Securities is U.S. Citadel Securities. Citadel Securities was also fined 1.1 billion won for violating regulations on naked short selling.
This is the first time in Korea that high-frequency algorithm trading is fined because it is judged as a disturbance in market order. High-frequency algorithm trading is a transaction that automatically determines the creation, price, and timing of orders, and how to manage orders for financial products through computer algorithms. An official from the financial authorities explained, "We plan to continue to strengthen market risk management in consideration of the recent trend of expanding the trading volume of high-frequency algorithms."
According to the Securities and Futures Commission, Citadel Securities will be fined under Article 429-2 of the Financial Investment Services and Capital Markets Act as it was found to have disrupted market order in a total of 264 stocks and 6,796 trading sections from October 2017 to May 2018. Citadel Securities was found to have made more than 500 billion won worth of transactions on an average of 1,422 stocks a day during the period.
AlphaBIZ 폴리(hoondork@alphabiz.co.kr)
