The Korea Exchange revealed a stimulation plan to promote REPO trading of various bonds held by institutional investors. This plan will be effective from February 14, 2011 after modification of the trading system.
Corporate bonds and special bonds (bonds issued directly by the company established by law) with outstanding amount KRW 200 billion or more and credit rate AA (includes AA+, AA and AA-) or above will be included the types of bonds eligible for REPO trading. Currently, bonds which are eligible for REPO trading are limited to some types of corporate bonds (guaranteed bonds or bonds issued by the KRX listed companies with outstanding amount KRW 200 bil. or more and credit rate AAA, along with government bonds), Monetary Stabilization Bonds and Deposit Insurance Fund Bonds.
Also, the KRX will allow early termination at REPO market before maturity for the convenience of market participants and will amend trading unit for KTB REPO from KRW 1 to KRW 10 to coincide with the unit in the National Treasury Management Law.