NXT·KDX Consortia Win Approval for 'Fractional Investment OTC Exchange'...Lucent Block Fails

The 'KDX consortium,' led by Korea Exchange (KRX) and Koscom, and the 'NXT consortium,' formed by NextTrade and Musicow, have been selected as preliminary licensees to operate an over-the-counter (OTC) exchange where fractional investment products can be traded. However, financial authorities attached a condition that the licensing review for the NXT consortium will be immediately suspended if the Korea Fair Trade Commission (KFTC) launches an investigation into allegations that it misappropriated technology.

On the 13th, the Financial Services Commission (FSC) held a regular meeting and approved the preliminary licensing plan for a fractional investment OTC exchange. In this round of screening, the NXT consortium ranked first with 750 points based on the assessment by the Financial Supervisory Service’s (FSS) external evaluation committee, while the KDX consortium followed with 725 points to make the preliminary approval list.

Lucent Block, which also participated in the competition, scored only 653 points and was eliminated. It trailed the top-ranked NXT by 97 points and the second-ranked KDX by 72 points. The evaluation panel noted that Lucent Block had “a markedly smaller equity capital base than competitors and lacks a mid- to long-term strategy for operating an OTC exchange.” In particular, the fact that its largest shareholder holds a 51% stake—making it difficult to view as a genuine consortium structure—was cited as a factor in point deductions.

Still, controversy over the NXT consortium’s alleged “technology misappropriation” emerged as a key issue in the approval process. Previously, including Lucent Block, competitors raised suspicions that NextTrade had copied ideas and technology. The external evaluation committee said it was “difficult to reflect the issue in the assessment due to insufficient objective evidence, and while there was a collaborative relationship, it is hard to conclude it amounted to technology misappropriation.”

Taking this into account, the FSC granted NXT a “conditional approval.” While granting preliminary authorization, it decided to fully suspend the full-license review process if the KFTC formally initiates an administrative investigation into the allegations. If a suspension due to the KFTC probe extends beyond six months or if legal disqualifying grounds are confirmed, the FSC said it will review the overall licensing policy framework.

The two consortia that received preliminary approval must apply for a full license within six months after meeting requirements such as staffing and physical facilities. If Lucent Block fails to obtain an issuance license, then under the previously submitted disposition plan, the fractional investment securities will be managed by Hana Securities, and the real-estate underlying assets will be managed by Hana Asset Trust and Korea Investment Real Estate Trust, respectively.