Korea Exchange

On December 8^th, 2014 (after KRX regular trading hours on December 8^th), Korea Exchange (KRX) listed USD/KRW FX futures on CME Globex for its overnight  trading session. KRX also listed back-dated contract months for existing KOSPI 200 futures up to the maturity of 3 years to meet the trading needs of longer term contracts.

• New USD/KRW FX futures launch on CME Globex and extension of KOSPI 200 futures contracts
  
• Contract Specifications and Trading Rules

CME Group and Korea Exchange (KRX) have a strategic partnership realized through a market linkage agreement that the selected KRX products are hosted on CME Globex for its overnight trading hours. Currently, the agreement enables KRX members to trade KOSPI 200 futures and USD/KRW FX futures during the overnight session on CME Globex via the KRX’s Unified System for Global Trading (USG). The trades executed on CME Globex will be combined with the trades of the next regular trading session for a single cycle of clearing and settlement.

The partnership provides:

• A global distribution network for the KOSPI 200 futures and USD/KRW FX futures
  
• Virtual 24-hour access to the contracts via KRX member firms and KRX-operated trading frontend system (USG)

For additional information: CME Group and KRX Partnership

Below is the overall on-boarding procedure for a customer who would like to trade the KRX products on CME Globex:

1. A customer is required to open an account with one of the KRX member firms. If the customer has an account already for KRX regular trading session, the same account may be used for the overnight trading session. Please contact your CME Global Account Manager to be advised on KRX member firms providing access to KRX products on CME Globex.
   
   
2. With regard to connectivity, the customer will need to set up connection with a KRX member firm by either connecting to the member firm within the member’s data center or establishing a WAN connection from overseas. Customer’s direct connection to CME Globex is not available at the moment as DMA is not allowed for any KRX products under the Korean regulations. Customers may be able to utilize a web-based trading frontend downloadable from the website of KRX member firm. For all cases, orders are required to pass through the USG system which has direct connectivity with Globex via CME hub in Seoul.
   
   
3. If a customer qualifies for QII (Qualified Institutional Investor) status, the customer’s orders may not need to go through the pre-trade margin control of KRX member firm, but non-QII customers will be subject to pre-trade margin requirements before submitting orders.
   
   
4. As to market data, if a customer maintains direct connectivity with CME Globex, the customer can subscribe to Globex MDP channel for KRX market data. Otherwise, the USG system also distributes market data to KRX member firms and customers.
   
   
5. As KRX self-clears, all trades executed on CME Globex will be transferred to KRX for position management and credit controls, and also be consolidated with the trades of regular session on the following trade date for clearing and settlement. As such, all margin and settlement notices will be processed by KRX and its clearing member firms.
   

As opposed to order routing which is required to go through the USG system located in Korea, customers are able to leverage existing connectivity with CME Globex to subscribe to KRX market data on Globex. However, customers are required to be licensed with KRX before receiving KRX market data.  Please contact your CME Global Account Manager for more information.

KRX, Korea Exchange Inc., established in January 2005 through the merger of the Korea Stock Exchange (KSE), the Korea Futures Exchange (KOFEX), the KOSDAQ Market, and the KOSDAQ Committee, is the sole exchange in the Republic of Korea. KRX operates the centralized securities and derivatives markets where stocks, bonds and derivatives are traded on a common platform called EXTURE+. KRX offers:

• Full access to both derivatives and cash markets
  
• Clearing and settlement of all transactions on its markets as a one-stop service
  

Its flagship KOSPI 200 futures and options are two of the world’s most liquid index contracts. Few products combine widespread retail liquidity with institutional interest so successfully. The futures contract is a world leader among stock index futures contracts, with a total 2009 volume of over 83 million contracts traded. Its counterpart, the KOSPI 200 option, has been the world’s most actively traded derivatives product for several years.

Learn more at eng.krx.co.kr