Hong Kong’s HKEX Explores Cross-Listing Derivatives with Korea’s KRX

A non-binding letter of intent (LOI) was signed this Tuesday in Asia by Hong Kong Exchanges and Clearing (HKEX) and Korea Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term (KRX), as they are set to explore the cross-listing of equity derivatives in each other’s markets, as per an official statement.

The deal was inked during a ceremony in Hong Kong today, signed by both HKEX’s Head of Markets, Roger Lee, and KRX CEO Kyungsoo Choi.

The LOI serves as a first step in considering the equity derivatives which so far include stock index futures and options, and single stock futures and options offering in local currency, aimed to make the products more fungible across borders.

Cross-listing of our equity derivatives would create new trading and Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term opportunities for investors in Hong Kong and Korea.

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Cross-border fungibility

If cross-listing of the instruments is achieved, KRX products would trade in Hong Kong dollars at HKEX in Hong Kong, and HKEX products would trade in Korean won at KRX in Korea.

The cross-listing between KRX and HKEX will open up significant opportunities, as the trading hours largely overlap.

Financial market synergies including cross-border initiatives between governments, regulators, and public and private companies - including exchanges - continue, amid what appears to be inevitable globalization aimed to make economies more integrated and efficient overall.

"Equity derivatives are an important strength of HKEX and we look forward to exploring closer collaboration with KRX, one of Asia's leading exchange companies," said HKEX Chief Executive Charles Li, commenting in a corporate statement. "Cross-listing of our equity derivatives would create new trading and risk management opportunities for investors in Hong Kong and Korea."

"The cross-listing between KRX and HKEX will open up significant opportunities, as the trading hours largely overlap. Investors will be able to trade the cross-listed products in the same way that they transact local products," said Kyungsoo Choi, Chief Executive Officer of KRX.