Korean options and futures exchange
The plan has set a clear goal and regulatory principle tailored to each type of derivatives market as follows: Greater autonomy in market operation. Markets will be granted greater autonomy under the condition that it would not undermine stable operation of the markets and investor protection. Details related with market operation such as quotation price units or exercise price of options will be deliberated and decided by a derivatives market committee within the KRX.
Currently, the items of underlying assets for individual equity futures and options are specified by the Derivatives Market Business Korean options and futures exchange of the KRX. The Regulation will be revised to allow automatic listings of equities that meet certain requirements as underlying assets. Introduction of new derivatives markets. The exchange-traded derivatives market has been strictly limited with only 15 products listed on the KRX, while 1, products traded on CME in the U.
Reflecting the trading volume of spot transactions, the FSC will actively introduce new derivatives markets in high demand such as V-KOSPI futures, sector index futures and night time trading of US dollar futures, which korean options and futures exchange provide professional investors with an instrument of risk hedging. Products to be introduced. One to two years later. To be reviewed for introduction. Short-term interest rate futures e. Yuancommodities e.
Introduction of qualified retail investors. More than one-year experience of futures trading allowed under 1 st stage. KRW 30 million of minimum margin. KRW 50 million of minimum margin. Products allowed to invest. Expanded participation of professional investors. Currently, only securities companies are allowed to directly trade exchange-traded derivatives. The FSC plans to allow banks to directly trade treasury bond and currency derivatives on the KRX, given that banks have expertise in transaction of treasury bonds and currencies and sufficient experience of trading in OTC derivatives markets.
The direct trading of banks will be limited to USD futures and year treasury bond futures newly introduced; and gradually expanded to other products depending on market situations within the next five years. The measure is expected to provide institutional investors and commodity traders with effective tools for hedging currency- or interest rate-related risks and contribute to a balanced growth korean options and futures exchange derivatives markets, currently skewed toward equity derivatives.
In response to growing risks of default and huge losses with an increase korean options and futures exchange algorithm trading, the FSC plans to give the KRX greater authority to monitor and supervise default risks of security firms. The FSC is looking to revise the default procedure in accordance with international standards  so that the capital of the clearing house will be used prior to the pool of default fund to absorb the losses.
Details will be set out by the end of The FSC plans to introduce price banding limits on futures and options trading to mitigate excessive price fluctuations. The KRX will be granted authority to take remedies for huge losses incurred by erroneous korean options and futures exchange. Monitoring on high-frequency trading.
The KEZ will strengthen relevant regulations and tighten monitoring on high-frequency trading in order to prevent market abuse and unfair trading. Starting from June 30 this year, qualified won-denominated korean options and futures exchange rate swaps IRS transactions will be required to be cleared through the CCP. Trade Repository TR system will be introduced to improve transparency of OTC derivatives trade in accordance to the G20 after considering domestic conditions and international standards.
The current law allows issuance of a variety of structured securities. Rypes of products actually being traded in the market, however, are limited to equity-linked securities ELSderivatives-linked securities DLS and equity linked warrant ELW. Issuance structure of ELS will be diversified. Public disclosure and sales method of ELS and DLS will be improved to make it easier for investors to compare and choose products. Issuance korean options and futures exchange of ELW will be korean options and futures exchange.
Measures to be taken. Create new derivatives markets. Introduce qualified individual investor system. Permit korean options and futures exchange participation of professional investors. Grant approval to KRX derivatives investment participants. Introduce price banding limits. Expand the scope of derivatives contract to be cleared through the CCP. Launch consultations with relevant institutions and research. Enable ELS product comparison.
Consult with the industry and establish necessary system. Standardize ELW issuance terms. Events Festivals Exhibitions Performances Overseas. Measures to be taken schedule. Grant greater autonomy in market operation. Revise KRX regulations 2 nd half of Revise KRX regulations 2 nd quarter of Launch consultations with relevant institutions and research within Revise KRX regulations 3 rd quarter of Consult with the industry and establish necessary system 2 nd half of
The Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) have received complaints about similar problems. These include pressure to send additional money, and excuses for why the firm cannot credit gains to a customer's account, close an account or send purported gains to the investor.
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