The Korea Exchange (the “KRX”) disclosed its plan to pursue the following in 2013 on December 16, 2012:

  • Overnight US Dollars Futures: The KRX plans to expand its overnight market, whose current offering is limited to KOSPI 200 futures and options, to include US Dollars futures. To further foster the US Dollars options market, the KRX plans to change US Dollars options from being physically settled to being cash-settled.
  • Volatility Index Based Futures: The KRX plans to review once again the possibility of launching a volatility-based futures product, which has been under consideration since 2010 but has not been materialized due to the opposition by the regulatory authority. The introduction of such product is expected to expand the means for institutional investors to hedge equity-linked securities and debt-linked securities.
  • Central Clearing Counterparty Service for Over-the-Counter Derivatives: The KRX plans to obtain a license for central clearing counterparty (“CCP”) for over-the-counter derivatives as soon as the proposed amendment to the Financial Investment Services and Capital Markets Act comes into effect. At first, the KRX plans to offer central clearing services for KRW-interest rate swaps and then expand its services to overseas foreign exchange futures, USD-interest rate swaps, etc. The KRX also plans to partner and/or cooperate with foreign CCPs. The proposed amendment has not yet been passed by the National Assembly. But, it is expected be legislated at the extraordinary session to be held by the National Assembly in February 2013.