Nextrade and 20 other investors established Nexchange, a preparatory company set up to operate an over-the-counter market for fractional investment products, on the 29th.
Nexchange held its inaugural general meeting the same day, approving its articles of incorporation and appointing directors. Chung Yoo-shin, a distinguished professor at Sogang University's Graduate School of Business, was named the company's first chief executive. Chung previously served as chief executive of Korea Venture Investment Corp. and Standard Chartered Securities Korea.
Lee Moon-young, a professor of accounting at Dongduk Women's University, and Lee Bong-heon, a former division head at the Korea Financial Investment Association, were appointed outside directors. Kim Hak-soo, chief executive of Nextrade, and Han Il-hyun, a division head at Shinhan Securities, will serve as non-executive directors.
The Nextrade consortium obtained preliminary approval for a beneficiary certificate brokerage license in February and applied for final approval on the 10th of last month. Once that approval is granted, Nexchange plans to operate a secondary market for fractional investment products.
In the market's early stages, it will handle fractional investment products backed by music royalties, aircraft engines and real estate loan receivables. Trading will gradually expand to include artwork, webtoons, performances and accounts receivable.
Nexchange said it will focus on addressing the low liquidity and difficult price discovery that have long been cited as limitations of the fractional investment market. To make it easier for investors to buy and sell the products they hold, the company plans to offer 12-hour trading days, low fees and a range of order types.
The company will also put in place investor protection measures, including market stabilization mechanisms and an investor protection fund. It plans to build close cooperation with issuers, brokerages and the Korea Securities Depository to support stable market operations.
"We will move forward without delay to secure final approval for our beneficiary certificate brokerage license so that Nexchange can establish itself as trusted distribution infrastructure for the fractional investment market," Chung said. "Through stable market operations and an expanded range of tradable products, we will support healthy growth in the fractional investment market."
