The Korea Exchange (KRX) has received an authorisation for over-the-counter derivatives clearing business from Korea’s regulator, the Financial Services Commission (FSC).
As a result, KRX will become the central counterparty in South Korea, offering clearing services for both exchange-traded and OTC market products.
Already listing KOSPI Index futures and options, KRX is the world’s largest derivatives exchange, in terms of the number of transactions.
Reporting of OTC transactions to governmental authorities is now required under the Financial Investment Services and Capital Markets Act. According to the revised Capital Market Act, the central clearing of Korean won-denominated interest rate swaps in Korea will become mandatory from 30 June 2014, and KRX plans to launch clearing services for KRW-denominated interest rate swaps from December 2, 2013.