International institutional investors will soon be able to trade derivatives faster on the Korea Exchange (KRX), which is home to the Kospi 200 index.
The Kospi 200 index is one of the most liquid in the world, with a current average trading volume of approximately 15 million Kospi 200 index options contracts traded per day, according to KRX statistics.
Now, Asian telecommunications provider KVH and Koscom, a financial IT services provider, have teamed up to offer proximity hosting services for KRX derivative trading customers at Koscom’s new data centre in Busan, South Korea’s second city.
Under the deal, the two firms will also offer ultra-low latency connectivity from overseas financial centres to Seoul and Busan through KVH’s regional network and Koscom’s Stock-net financial connectivity network in Korea. These services will be offered in conjunction with connectivity to Tokyo, Singapore, Hong Kong, Sydney and Chicago and will be available from 4 June, when the new Koscom Busan data centre opens.
The new proximity hosting service will include managed computing and network services. The ultra-low latency service aims to offer the shortest network route possible. Both services will be managed with service level agreements. The intention is to provide international traders with a competitive advantage in high-frequency trading.
“Low-latency networks and proximity hosting have become extremely important in today’s trading environment,” said Richard Warley, president and CEO of KVH. “With Koscom’s strong presence and expertise, KVH will be able to enhance its global capabilities and services to enable global traders to capitalise on all the benefits of robust low-latency solutions.”
KRX and Japan’s Tokyo Stock Exchange Group recently signed an agreement that could lead to greater collaboration for cross-listed products and services between the two bourses.
Meanwhile, a proposed change to Korea’s Financial Investment Services and Capital Markets Act, issued by Korea’s Financial Services Commission on 26 July 2011, would see a licence system introduced to allow new stock exchanges or alternative trading systems in the country for the first time – although no official decision has yet been made.