Credit Suisse First Boston is preparing to rev up its corporate business in Korea as well as tackle won-denominated trading across asset classes, after last week receiving a full onshore derivatives license for the country. The license, issued by the Financial Supervisory Service, will allow CSFB to offer interest rate, equity, credit and fx derivatives.
"Korea is opening to global investment banks and really taking its financial markets to another level," said Steve S.Y. Park, managing director and branch manager in Seoul. The firm will shortly begin onshore trading and marketing. "We've been preparing for this and have placed structurers, traders and risk management staff onshore," noted Park, adding, "It took us a while to prepare--over eight months and 8,000 pages of documents." Park said initially the firm will focus on corporate derivatives structuring, such as monetizing cross-share holdings. CSFB has been active in this arena for several years but being onshore will allow it to offer better pricing.
Only rival securities house Lehman Brothers has a full-service derivative license, while Merrill Lynch is able to handle fx and interest rate products onshore (DW, 6/27/04). Other firms, such as Citigroup, Deutsche Bank, HSBC, JPMorgan and UBS offer fx and interest rate products in Korea under their banking licenses.
