South Korea eases the entry requirements for trading derivatives

South Korea eases the entry requirements for trading derivatives

The South Korean Financial Services Commission (FSC) has taken steps to liberalize the retail, over – the – counter (OTC) derivatives market by lowering the minimum deposit requirement for trading such products to 10 million Korean Wons (roughly 8500 USD) from 30 million Korean Wons or 25 300 USD.

The objective of the authorities is to give the derivatives market a boost in light of the increased interest in the retail crypto market, which is deemed too risky.

The new deposit requirement applies to trading futures and buying options. In case a customer wants to sell options, however, he or she will have to deposit at least 20 million Korean Wons or about 17 000 USD.

“Excessive entry barriers act as obstacles to retail investors, while strict margin requirements hinder institutional investors’ participation,” the FSC said in a statement.

To help the market further FSC plans to facilitate the development and listing of new derivatives, but this will happen in the fourth quarter of 2019.

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