The Korea Exchange delayed its decision to impose membership sanctions on Merrill Lynch Securities. The Korea Exchange held a meeting of its market monitoring committee on June 19 and said it will resume a meeting on member sanctions against Merrill Lynch Securities in July.
The exchange was scheduled to take measures such as imposing sanctions or warning after deliberating whether the Seoul branch of Merrill Lynch Securities violated the trading rules of the exchange in the course of entrusting U.S. Citadel Securities' high frequency trading.
The meeting is the third of its kind on the Merrill Lynch sanctions agenda. The exchange has held two meetings since March, but failed to narrow differences, which eventually led to its third postponement.
"There has been a request from a member company for additional explanation opportunity," an official at the exchange said. "We accepted that and will take a closer look."
Merrill Lynch is accused of being involved in a market disturbance through high frequency trading. Merrill Lynch reportedly served as a channel for the trading of Citadel and is suspected of disrupting the market through high frequency trading on the KOSDAQ market.
After the exchange confirms the sanctions against Merrill Lynch for violating market monitoring rules, it plans to notify Citadel to the authorities on charges of violating the Capital Market Act.