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Background
The international derivatives market is one of the most notable sites for globalization. Eurex and the Chicago Mercantile Exchange(CME) have both achieved market dominance standing at the center of the global business network in the futures industry. Keeping up with this global market trend, KOFEX has formulated a plan to become one of the world's top five exchanges.
In addition to the quantitative growth gained via the takeover of Kospi 200 contracts, KOFEX also seeks for a qualitative leap by bringing more competition into the Korean futures industry.
Details of the five-point action plan are as follows;
- To become a global financial services company
- To diversify product lines
- To globalize the Korean futures industry
- To enhance the efficiency of the trading platform
- To contribute to the development of Busan into one of Asia's futures centers
1. KOFEX will be a global financial services company.
- Still as a regional market, KOFEX will focus its attentions on expanding its customer base particularly overseas by strengthening its global network and seeking joint business initiatives with leading foreign exchanges.
- KOFEX will be a customer-oriented market by providing support for member firms' marketing activity and improving services to market participants.
- KOFEX shows more dependency on a few of key products such as Kospi 200 futures and options,and KTB futures.
- To meet investors' various demands and to diversify its product portfolio, Kofex will develop new products including;
- new index futures on Kosdaq Star Index, a new market indicator developed by KOSDAQ, tech-heavy over-the-counter stock market, and other Korean stock price indices as well as single stock futures.
- financial futures such as long and short interest rates futures, swap futures, and Euro currency futures.
- commodity futures on gasoline and crude oil
- To improve market accessibility for US investors, KOFEX plans to receive no-action letter from CFTC on Kospi 200 futures in 2004. And KOFEX also plans to have Korea Treasury Bonds to be designated as exempted securities by the SEC.
- KOFEX will enhance cooperation with ISVs(independent Software Vendors) to connect international investors to KOFEX.
- KOFEX plans to hold overseas road-shows and promote cross trading with foreign exchanges such as CME and Eurex.
- KOFEX currently runs two trading systems. One is supported by KOSCOM for Kospi 200 contracts, and the other is OM's CLICK and SECUR system for other products. In order to maximize integrated market synergy, KOFEX will unify KOSCOM and OM systems into a single effective system in the long-term and build an efficient back-up system.
- KOFEX will contribute to developing Busan, its host city into an Asian futures hub by building futures related infrastructure, holding international derivatives conferences, and providing more education to the community.
