[Edaily Marketin KIM YEON-SEO Reporter] The official licensing review for an over-the-counter (OTC) exchange for fractional stock investments is expected to take place this September. With the matter anticipated to be on the agenda for the Financial Services Commission’s regular meeting as early as early September, the likelihood of the OTC exchange launching within the year is increasing.

According to the financial investment industry on the 27th, the Financial Services Commission (FSC) is expected to review the final licensing applications for the fractional investment OTC brokerage businesses—submitted by the KDX Consortium and the NXT Consortium, both of which hold provisional licenses—at its regular meeting this September. If the final licensing process is completed in early September, both companies are expected to begin full-scale preparations for operations with the goal of launching their exchanges by the end of the year.

The NXT Consortium and KDX submitted their applications for full authorization as fractional investment OTC exchange operators to the Financial Services Commission on the 10th of this month. The KDX Consortium is led by the Korea Exchange (KRX), while the NXT Consortium includes Nextrade, Shinhan Investment Securities, MusicCow Invest, and Blueard, among others. Financial authorities had previously selected both consortia as provisional licensees in February of this year.

An OTC exchange for fractional investment is a distribution platform that facilitates the buying and selling of fractional investment products—such as artwork, Hanwoo beef, and real estate income securities—among investors. The FSC has been operating a pilot program for fractional investment through the regulatory sandbox and is pushing to introduce an OTC brokerage system to establish a formal distribution framework for such products.

This final authorization process involves verifying whether the business plans submitted at the time of preliminary authorization have been implemented and assessing whether the human and physical resources—such as personnel and facilities—necessary for actual business operations are in place. Financial authorities plan to decide on final authorization at regular meetings of the Securities and Futures Commission and the FSC, following a review of application documents and on-site inspections.

Once the NXT Consortium receives full authorization, it plans to hold a founding general meeting in mid-September and begin the process of establishing the exchange in earnest. It is reported that the consortium is accelerating its preparations for the business after recently passing the Korea Fair Trade Commission’s review of the business combination.

The process of appointing a CEO is also expected to be finalized in October. Professor Jeong Yu-shin of Sogang University has reportedly been nominated as the first CEO. A financial investment industry official stated, “Once NXT receives final approval, it appears the consortium will swiftly proceed with preparations for the exchange’s launch, including holding a founding general meeting in September and finalizing the CEO appointment in October.”

The KDX Consortium, centered around the Korea Exchange, is also expected to begin full-scale organizational restructuring following the issuance of the official license. KDX is reportedly set to convene an Executive Nomination Committee in late September to begin the process of appointing management.

Currently, the key executives include CEO Jeong Joong-rak, formerly of NH Investment & Securities, and Son Seung-tae, Head of the Management Strategy Division at KDX and a former Korea Exchange employee. It is reported that they are building the trading system and organizational structure based on the Korea Exchange’s experience in market operations.

Market observers believe that if final approval is granted in September, both consortia will accelerate subsequent procedures—from appointing management to launching the exchange. A financial investment industry official stated, “Since both sides have been preparing their business foundations—including personnel and systems—since receiving preliminary approval, they will likely be able to swiftly finalize the appointment of the CEO and executives, as well as organizational structure, once final approval is granted in September.” The official added, “Preparations for the exchange’s launch are expected to proceed at a rapid pace, with the goal of opening the exchange within this year.”