http://www.ajunews.com/view/20140708154432443
So although it has been known to the market, this news article is pretty detailed.
A brief summary, Hyundai Futures was accused of receiving KRW 200Mil each month (Approx USD 200k) from Australian firm Zomojo to have naked direct access (=full ownership/control to the client, none to the broker) to the KRX to trade ETD products. Whichever KRX firm who cried wolf (rumor has it: one of the affected firms this year from the big chaotic options event), stated that it gave this trading firm an advantage over retail firms and is considered unfair trading.
Hyundai Futures claimed they don’t even have an account opened by Zomojo nor own a FEP serviced by them, and KRX/FSS somewhat backed their claims saying that with the new DMA regulations, there are/should be no cases as these, however even if they are to have brokerage audits, it would take a lot to figure out whether the KRX members are bending the rules.
Currently, there are 1200 accounts opened by foreign investors in F&O since March 2014.
Zomojo is one of the old players in the KOSPI market and has been known to promote/sell their FEP software to other brokers. It is not known which Korean brokers actually use their services. They were also involved with a lawsuit against Zeptonics, which can be read here:
http://www.brw.com.au/p/business/happening_zomojo_plans_again_clean_YmCYAggdUtVLv8vtkjRIEM
tradekospikorea 
This is shocking! Disgusting what these firms will do to get ahead. Who made these accusations? Is there any kind of paper trail?
LikeLike
Hi Jason, sorry for the late reply. It is known that it was some other competitor that ranted on the broker to the press, but indeed can be very false information. The only evidence is that newswire (the link on the blog post in Korean) that states those facts. After this article, FSS (Korea’s regulatory authorities) and KRX started audits for each members on how they manage their foreign clients to investigate on whether such practices are being done at the brokers. Currently as of now the audits are over and there will be some DMA guidelines for algorithmic clients by the KRX, but no detailed report of the findings of brokers’ practices yet.
LikeLike