North American multinational derivatives market place CME Group, along with Seoul’s fully integrated capital market place Korea Exchange Inc. (KRX) have today announced that effective December 8th, KRX’s US Dollar Futures contract will be hosted after-hours on the CME Globex electronic trading platform, providing international market participants expanded access to the Korean markets.
South Korea has become a destination of great interest to FX industry participants in the institutional sector as well as across the interbank market. Earlier this year, FX transactions across South Korea’s banks were reported to have expanded greatly, leading to a record in Chinese renminbi deposits in August this year, amounting to $16.2 billion according to the central bank, accounting for almost 26% of the total foreign currency deposits as of the end of July.
South Korea’s free market economy and advanced technological infrastructure, along with its close proximity and commercial alignment with important nations in the Asia Pacific region such as China, Hong Kong and Singapore, has spurred pioneering efforts by technology providers and executing venues alike. By hosting the US Dollar futures contract on KRX after hours, increased liquidity may generate an expansion in order flow for CME’s Asian interests.
As far as other efforts to enter the bank-based FX market in South Korea are concerned, LeapRate reported earlier this year that TradeStation, the North American contingent of Monex Group, had begun the initial stages of its partnership with Seoul-based Shinhan Investment Corp., a leading provider of brokerage and investment banking services in Korea, to make TradeStation 9.5, the latest version of the company’s trading platform, available to Korean retail and professional traders in their local securities and futures markets.
“The addition of KRX’s US Dollar Futures contract on CME Globex is an important part of our continued global expansion, and this will enable their products to benefit from the speed, reliability and transparency of our industry-leading electronic trading platform,” said Phupinder Gill, Chief Executive Officer of CME Group.
“This is a significant achievement, and highlights the success of our partnership with KRX. We look forward to working more closely with them in providing market participants access to round the clock risk management products,” said William Knottenbelt, Senior Managing Director, International, CME Group.
“The launch of this after-hours trading of US Dollar Futures on CME Globex will be another big step forward for KRX to internationalize the Korean Won cash and futures markets and globally expand its customer base,” said Kyungsoo Choi, Chairman and CEO of KRX. “In this regard, we are pleased that we can provide this enhanced 24-hour risk management tool to customers and the opportunity of a new revenue source to members.”
According to the Futures Industry Association’s Annual Volume Survey 2013, KRX’s US Dollar Futures is the 7th most traded FX futures contract in the world last year, with 51.8 million contracts traded. This US Dollar Futures contract is the second KRX contract to be hosted on CME Globex. In 2009, CME Group and KRX announced after-hours access to KOSPI 200 Futures on CME Globex.
For additional information about KRX’s US Dollar Futures contract on CME Globex, click here.