Omnibus Account for Foreign Investors
Beginning on June 26, an omnibus account system for derivatives will be implemented for foreigners. The plan is aimed at enhancing the convenience of foreign investors, which is one of conditions for the Korean stock market’s joining the Morgan Stanley Capital International (MSCI) advanced index. Hedge-specific accounts for individual investors will be also introduced on the same day. 22 items including individual stocks and options will be listed for the purpose of revitalizing the derivatives market.
The Financial Supervisory Commission (FSC) said on June 25 that it will continue to work on remaining tasks of measures to "enhancing the competitiveness of the derivatives market" conducted last November.
An omnibus account can handle multiple transactions in a single account with a global financial company. This account can provide convenience for a foreign investor by eliminating the inconvenience of creating separate accounts for each product and opening a separate account at a Korean financial company even if the foreign investor has an account at a global financial company.
An omnibus account for stock trading has been made since March, and an omnibus account for derivatives will be introduced on June 26 and an omnibus account for bonds will be introduced on June 29.
Also to be introduced on June 26 is an exclusive hedge account which makes an investor free from the basic deposit when the individual investor hedges within the range of spot assets. The scope of spot assets are limited to ETFs such as stocks and KOSPI 200 and the scope of hedge trading products to Individual stock futures and options, KOSPI 200 futures and options, and futures and call option sell-off and put option purchase of the KOSDAQ-150 futures and sector index futures. But the scope and objects will be ramped up in the future.
To meet demand for derivatives trading and increase market competitiveness, 22 new items -- three ETF futures and 19 stock futures and options, will be listed on the same day. The new listings will raise the number of listed stock futures and options from 123 to 132 and 20 to 30, respectively.