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Derivatives

Regulation Change Gives Korean House Credit Opener

Seoul-based Dongwon Securities will start offering credit derivatives on Korean underlyings after new regulations came into effect last week.

Seoul-based Dongwon Securities will start offering credit derivatives on Korean underlyings after new regulations came into effect last week. "We've been preparing for this for about a year," said B.J. Kim, executive v.p. in the treasury and markets division, adding, "We hope to complete the first transaction in the market." The new rules, announced earlier this year by the Ministry of Finance and Economy, allow onshore securities houses to offer interest rate and credit products (DW, 1/14). Equity-linked products have been allowed since 2002.

Kim said Dongwon will initially look to structure credit-linked notes and synthetic collateralized debt obligations for institutional investors, but it also hopes to tap the retail market later this year.

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