KRX Members Allowed To Deal Futures Directly With US Customers

The Commodity Futures Trading Commission (CFTC) has issued an order to Korea Exchange (KRX) permitting certain KRX members to deal KRX derivatives products such as KOSPI 200 futures directly with US customers without registering as futures commission merchants (FCMs). Now eligible member firms are able to solicit and accept orders directly from US qualified investors without the additional layer of US FCM.

KRX submitted a petition to exempt KRX member firms from FCM registration in January 2009 according to CFTC Regulation 30.10, and Financial Services Commission sent a representation letter on information sharing to the CFTC. 7 years after the submission, the CFTC finally issued the order.

Thanks to this order, US investors are expected to increase the trading in KRX futures markets as Korean member firms are able to solicit and provide information and infrastructure to US investors.

KRX will soon start administrative procedures for qualified member firms. Also, KRX plans to seek to allow its index options product become legally accessible to US investors through relief by the Securities Exchange Commission.