After-market trading of ETFs, whose introduction had been talked of being delayed because of the fallout from single-stock leverage ETFs, now looks set to take effect from next month as planned.
From next month it will be possible to trade stocks or ETFs in the after-market from 4 pm to 8 pm.
In the asset management industry there are concerns that, since estimating the indicative net asset value of ETFs is difficult and the infrastructure for redemption, creation and cancellation is incomplete, going ahead with after-market ETF trading as it is could bring back the volatility problems experienced with single-stock leverage ETFs.
The Korea Exchange yesterday (the 4th) asked each asset manager to "submit by the 7th a list of the ETFs to be traded in the after-market".
It is preparatory work for the 4 to 8 pm after-market trading the exchange will implement from the 14th of next month.
However, the heads of the asset management companies are known to have agreed earlier, on the 29th of last month, that the timing of after-market ETF trading should be pushed back.
The reasoning was that tasks requiring a response are already piling up in relation to single-stock leverage ETFs, and if an extension of trading hours is added on top, trading stability could deteriorate.
What the industry points to is the calculation of indicative net asset value and the creation and redemption infrastructure.
Basically, Koscom handles the calculation of indicative net asset value and the Korea Securities Depository handles the creation and redemption infrastructure, and neither institution has yet completed the related infrastructure.
The industry has even gone so far as to say it "amounts to telling people to trade at prices formed between investors while there is no indicative net asset value calculation and no creation or redemption infrastructure".
The point is that it could once again stir up the market volatility that flared with single-stock leverage ETFs.
The exchange's position, however, is that such worries are excessive.
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ㄷㄷㄷ Surely this is not the opening act...
▶ Original source: https://news.nate.com/view/20260805n14561
