The Financial Supervisory Service in Korea will permit local securities houses to trade over-the-counter equity derivatives next July; a move that players said will bolster the market. "[The regulations] will strengthen the competitiveness of the securities companies and offer investors a greater range of choices in the financial market," said Lee Young Gi, associate in the securities supervision department of the FSS in Seoul.
"More participants will lead to greater liquidity," said Charles Chiang, equity derivatives trader at Nomura International in Hong Kong. He continued that offshore flow products such as index options and equity swaps for the Korean market totaled about USD100 million this year. Chiang added that with the new regulations enacted, the Korean OTC market is set to grow, likely expanding by over 50% in the first year and substantially higher after that. "We've been waiting for this for a long time," noted one equity derivatives regional head at a global firm in Hong Kong. "This is good news," he continued, "this will in effect open up the onshore market for international players." Currently, international firms trade primarily in the offshore market.
