Financial authorities’ reported policy to spin off the tech-laden Korea Securities Dealers Automated Quotations market from the main bourse Korea Exchange has triggered a fiery feud among interested parties.

The regulator Financial Services Commission is slated to reveal the restructuring plan for the KRX by the end of this month. But whether the restructuring plan will include details on the separation of secondary KOSDAQ from the KRX is yet unclear.

“(The FSC) have sought stronger market-based competition and keep on with thisstance,” an FSC official close to the matter said Monday.

“We are only at a preparatory stage, considering various alternatives to strengthen market competition. We cannot detail how far we are, but we have been discussing the market competition agenda from a wider perspective than the venture industries that are simply engaged in whether KOSDAQ should be separated or not.”

The KOSDAQ separation controversy is not new to the FSC and the parties of interest. Yet the issue returned every year as a number of first generational venture businessmen advocated the separation, seeking to lower the regulatory bar for KOSDAQ listing. Last year, the KRX was opposed to the separation of the KOSDAQ, as the secondary stock trading board in the red would not survive the global competition alone.

Earlier Monday, Lee Dong-gi, the head of KRX’s labor union, issued a bitter warning to KRX chief Choi Kyung-soo, calling for the KOSDAQ operator to step up its defense against the government’s preparation to split the KOSDAQ from the KRX.

“As the leader of the capital market, agreeing to split KOSDAQ (from KRX) is deriliction of duty,” Lee claimed in a letter of protest to the KRX chief.

The angry union head alleged that Choi has sided with the financial authorities over the restructuring plan of KRX. “We thought you would stand up against the FSC on the issue, when you said you created a task force with KRX’s A-game players to strengthen the KRX’s competitiveness, only to undermine our just cause to prevent the separation move.”

The KRX has not posted an immediate response to the labor union’s protest, implying that the KRX also opposes the possible separation of the KOSDAQ.

“Our position is set, but we have to wait for the decision makers’ cue (to notify them),” a KRX official said. 

By Chung Joo-won (joowonc@heraldcorp.com)