Korea Exchange seeks to extend derivatives trading hours

South Korea’s bourse operator is seeking to extend derivatives trading hours by opening the market 15 minutes earlier at 8:45 am and allow for nighttime trading, its Chairman Sohn Byung-doo said on Tuesday.

The moves are aimed at reducing spot market volatility and cushioning the impact of global market data and news, he said in a New Year’s press conference.

Currently, both spot and derivatives markets open at 9 am simultaneously in South Korea. But global bourses start derivatives trading earlier than spot trading.

Extending derivatives trading hours is also expected to solve the Korea Discount, or lower valuations for South Korean companies than global peers.

The bourse operator is also considering several measures to improve market accessibility for foreign investors, said the former vice chairman of the regulatory Financial Services Commission.

They may include expanding the scope of companies subject to English disclosures and revising dividend policies so as to comply with global practices.

Within this year, it will abolish the pre-registration requirement for foreign investors when investing in listed Korean stocks as well.

Such moves come as South Korea is set to extend foreign exchange trading hours by eight and a half hours to close the market at 2 am from the current 3:30 pm.

Finance Minister Choo Kyung-ho said earlier this month that the government will lengthen trading hours of the local forex market as early as the second half of next year and allow foreign investors to directly participate in the market.

Write to Tae-Ung Bae and Gyo-Beom Gu at btu104@hankyung.com
Yeonhee Kim edited this article