Newedge has started selling a complete range of futures and options in Korea after becoming the first foreign broker to win a full futures licence there.
The new licence allows it to sell all of the products on the Korea Options and Futures Exchange to local investors, including interest-rate, currency and commodity products. It also lets it sell offshore futures and options to Korean investors for the first time.
The 18 other foreign brokers still waiting for their full licences from the Korea Financial Services Commission are still restricted to selling locally listed equities products only. That means they will have to sit on the sidelines while Newedge builds market share in some of the country's most popular trades, such as futures on Korean treasury bonds and the value of the won against the dollar.
"Being the first foreign company in Korea able to offer these products is a great achievement," said Kevin Lee, the head of Newedge's Korea business. "We expect strong demand from local clients to trade all the listed futures and options products that Newedge can offer."
That is a reasonable expectation given Korean investors' demand for such products -- the Korea Exchange is the world's largest derivatives exchange by trading volume, ahead of Eurex and the Chicago Mercantile Exchange. As such, derivatives licences to operate in the country, whether for listed or over-the-counter products, are extremely attractive assets for foreign brokers.
"The full licence on Korea Exchange is an important step to further deepen our presence in one of the eight countries we cover with our Asian footprint," said Pierre Gay, chief executive of Newedge in Asia-Pacific. "This is aligned to our long-term strategy of providing easier and direct access to foreign institutions investing in Asia, and offering domestic players a reliable access to the outside trading world."
Newedge is a joint venture between Calyon and Societe Generale, and was established two years ago as part of a strategy to win market share.