The Korea Exchange (KRX) has issued an explanation over recent controversy surrounding an extension of trading hours, saying it differs from the facts.

The Korea Exchange on Tuesday released an official position on five issues related to the introduction of a pre- and after-market, scheduled to take effect on June 29.

The exchange first drew a line against criticism that it is shifting responsibility for market surveillance to member firms.

An exchange official said member firms' own monitoring system (SMP) has been in place since 2023 only in the regular market, excluding after-hours trading. It will be applied to the pre- and after-market in the same way as the regular session in consideration of the burden on member firms and investors, the official added.

It also stressed that it will guide and support member firms' monitoring of wash trades, while the exchange will conduct market surveillance to block market disruption at the same level as the alternative trading venue NXT.

On concerns about weakened price reliability, it cited global standards.

It plans to abolish the existing after-hours single-price market and apply a continuous trading method to the pre- and after-market.

A KRX official said it plans to apply enhanced volatility interruption measures, including dynamic and static volatility interruption devices, to ensure stable price formation as a regular exchange, and to operate dedicated market makers.

On the possibility of confusion stemming from changes to computer systems, it acknowledged there are unavoidable aspects but promised sufficient support.

It acknowledged that even member firms that do not participate in the pre- and after-market will need to change the structure of message specifications to process orders for the regular session.

However, the exchange said the development is possible within two months and that it will actively support related work development by providing specific guidelines.

On concerns about excluding digitally vulnerable groups, it raised the option of allowing phone orders.

The exchange said restricting orders at branches nationwide is a measure to reduce brokerages' labour burden. It said it will instead allow phone orders through head office customer centres, or call centres, to minimise exclusion of older investors.

According to the exchange, branch-based orders by individual investors account for about 2.2 percent, while the figure for the NXT pre- and after-market is estimated at less than 1 percent.

On the burden of building IT infrastructure, it added that NXT does not plan to extend its pre-market operating hours, which start at 7 a.m., so operating hours do not overlap. As a result, it judged there will be no additional development burden such as rebuilding a smart order routing system (SOR).

A KRX official said it will continue to push ahead while actively reflecting the views of stakeholders through one-on-one meetings with brokerages and others.