Korean futures market targets US investors
The Korean Exchange has made an agreement with US regulator the CFTC to allow Korean buy-siders to trade with the US without registering as futures commission merchants – a step that the exchange says will increase US activity in the Korean futures market, which is one of the largest in the world.
The agreement covers derivatives including the KOSPI 200 futures contract, which can now be traded direct with US clients. It also suggests that local banks will be able to solicit and provide information and infrastructure to US investors.
Before the deal with the US authorities, US investors would have to open an account with a futures clearing merchant to trade Korean futures, but they did not have direct access. This meant that although more than half of KOSPI 200 futures transactions last year were made by foreign investors, the US accounted for a mere 0.66% share of the transactions.
Korea Exchange has been broadening its ties in recent months – most notably with a deal with the European Commission in November last year, which established equivalence between EU and Korea securities regulations, a step that allowed European banks to clear with the Korean CCP.
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