The FSC has notified of new rules for CFD, as announced in Mai 2023 (please see eventid=21594).
1. More transparent information to investors
For CFD, the Korean Exchange trade data system (data.krx.co.kr) will display information on the investor type: individual, institution or foreign investor. Additionally, information on CFD balances will be available as a reference for investment on freesis.kofia.or.kr – a website operated by the Korea Financial Investment Association.
2. Retail investor requirement
Retail investors are required to have sufficient experience to be eligible for trading CFD. The minimum average monthly balance is KRW300 million (for minimum 1 year) within the past 5 years for transactions involving „equity stocks, derivatives products or highly complex derivatives-linked securities“. If a retail investor wants to maintain the status of a qualified professional investor, there will be an additional, in-person verification process performed by a securities firm.
3. Better retail investor protection
It is mandatory for CFD traders to deposit at least 40% of the CFD trading amount to strengthen risk management.
Enhanced Transparency and Investor Protection Measures on CFD Transactions to Take Effect from September
ID
24794
Other Features
CFD
credit
Derivatives
eligibility
investor protection
investors
loan
margin
OTC derivatives
professional investor
regulatory
retail investors
risk
risk management
securities
shareholders
trading
transparency
Date Published: 2023-08-31
Date Taking Effect: 2023-09-01
Regulatory Framework: Financial Investment Services and Capital Markets Act (FSCMA)
Regulatory Type: information
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