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Derivatives

Korean Warrant Mart Kicks Off

A derivatives warrant market has launched in Korea, which equity officials expect to develop into a major market.

A derivatives warrant market has launched in Korea, which equity officials expect to develop into a major market. "It has great potential to become one of the leading warrant markets," said Steve Park, at Credit Suisse First Boston in Seoul. The market, which has been in the works since earlier this year (DW, 6/24), went live at the beginning of the month, with the launch of several index and single-stock names.

Issuance at the moment is restricted to domestic securities houses such as Samsung Securities andGood Morning Shinhan Securities, but CSFB is the first foreign house with onshore derivatives licensing to act as a market-maker for existing warrants. Other international players will be more indirectly involved as the market takes its first baby steps. "Initially direct foreign participation will be limited until there are further regulatory changes," said an official at UBS, adding foreign houses, however, will be managing the risk for local players, by offering OTC option hedges for example.

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