NexChange launches as preparatory firm for fractional investment OTC exchange

NexChange, a preparatory firm that will operate a fractional investment over-the-counter exchange for the distribution of security token offerings, launched Tuesday.

Twenty-one investing institutions, including Nextrade, held a founding general meeting Tuesday to establish NexChange as the preparatory company that will run the fractional investment OTC exchange.

The founding meeting covered reports on incorporation matters, approval of the articles of association and election of directors. At a subsequent board meeting, Jung Yu-shin, a special professor at Sogang University's Graduate School of Business, was named inaugural CEO of NexChange.

Lee Moon-young, a professor of accounting at Duksung Women's University, and Lee Bong-heon, a former division head at the Korea Financial Investment Association, were appointed as outside directors. Kim Hak-su, CEO of Nextrade, and Han Il-hyeon, a division head at Shinhan Securities, were named non-executive directors.

"We will pursue the full securities investment brokerage license without delay so that NexChange can establish itself as a trusted distribution infrastructure for the fractional investment market," Jung said.

He said the company plans to build a credible OTC distribution market that addresses the longstanding limitations of low liquidity and difficulty in price discovery, creating a more convenient and rational trading environment.

To that end, NexChange plans to offer differentiated trading services designed to improve investor convenience — including 12-hour trading, low commission fees and a variety of order types — while putting in place a full investor protection framework comprising market stabilization mechanisms and an investor protection fund.

The company also said it would build close cooperative ties with issuers, securities firms and the Korea Securities Depository.

"After receiving the full license, we will do our utmost to support the sound growth of the fractional investment market through stable market operations and expansion of tradable products, and to make NexChange the core distribution infrastructure of the domestic fractional investment market," Jung said.

NexChange plans to launch with fractional investment products centered on music intellectual property rights, aircraft engines and real estate loan bonds, and intends to gradually expand its scope to include artworks, webtoons, performances and accounts receivable.

Earlier, the NXT consortium received preliminary approval from the Financial Services Commission for the fractional investment OTC exchange in February.

Nextrade formed the NXT consortium together with 21 institutions, including Shinhan Securities, MusicCow and Blueard. Nextrade is the largest shareholder.

Under amendments to the Electronic Securities Act revised in February this year, the issuance and distribution of STOs will be permitted from February next year. Both the NXT consortium and KDX — a consortium led by Korea Exchange — applied for full licenses last month, accelerating their preparations to open the market.