IB supported stock exchanges - NO Korean stocks?

IB offers Korean SSFs. They are liquid and perhaps better as don't have to deal with the 30bps stamp tax on sales. (which of course you'll pay in some shape or form within the SSF spread). That's the easiest way to trade the big name Korean stocks IMO.
 
GRULSTMRNN said:
Even professionals outside of Korea generally stay far away from Korean stocks. The only tradable assets in Korea are kospi futures and options.
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That's what I don't get given the highly liquid Kospi, how can prop firms trade Kospi if there are shorting and other constraints on the singles side. None applies to them?
 
entropytrading said:
That's what I don't get given the highly liquid Kospi, how can prop firms trade Kospi if there are shorting and other constraints on the singles side. None applies to them?
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Can hedge with SSFs but there is access for institutions for share trading. They have investor registration requirements which need to be filed and you need an institutional desk to get currency conversions at a decent rate. The biggest thing though when the index options were crazy liquid was that there was a large retail component and the market makers (who were really HFTs) were scalping size back and forth in the front month. It wasn't about hedging with stocks but then again there was also plenty of expiry games such as the Deutsche Bank manipulation which more than covers the cost of stamp.

https://en.yna.co.kr/view/AEN20190402008400315
"Ong and the others are accused of working together to carry out a 2.4 trillion won (US$2.1 billion) stock selloff on South Korea's main KOSPI bourse on Nov. 11, 2010."
 
Generally when trading isn't offering to US retail, but available to Institutional it's about reciprocal compliance agreements. Korean futures are CFTC approved for US retail, even though they just got tagged for by the CFTC for regulatory shortcomings. Last I looked no reciprocal agreement with the SEC. Also don't confuse market cap. and volume with liquidity. Kospi blows almost everything out by volume, but it really isn't very liquid and I suspect that is part of why no regulator has look to the reciprocal agreement completed.
In the '80s one of the most actively traded names in the US was TMX(Telefonos Mexixo) and Mexico had fairly tight currency restrictions. Most days it was the most Stock and options traded in the US and almost all the volume was an arb on the currency restrictions. Large holders and small investors alike were doing conversions to arb the restrictions. There is more granularity to the strategy, but I suspect there is little appetite from either regulator to make it trade able here._
 
ETJ said:
Generally when trading isn't offering to US retail, but available to Institutional it's about reciprocal compliance agreements. Korean futures are CFTC approved for US retail, even though they just got tagged for by the CFTC for regulatory shortcomings. Last I looked no reciprocal agreement with the SEC. Also don't confuse market cap. and volume with liquidity. Kospi blows almost everything out by volume, but it really isn't very liquid and I suspect that is part of why no regulator has look to the reciprocal agreement completed.
In the '80s one of the most actively traded names in the US was TMX(Telefonos Mexixo) and Mexico had fairly tight currency restrictions. Most days it was the most Stock and options traded in the US and almost all the volume was an arb on the currency restrictions. Large holders and small investors alike were doing conversions to arb the restrictions. There is more granularity to the strategy, but I suspect there is little appetite from either regulator to make it trade able here._
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There is nothing restricting US retail to trade Korean stocks. You do need to have an investor ID and deal with the currency controls. The SEC has no provisions on trading stocks outside of the US that I am aware. If so, please post a link. They do have restrictions on stock options which is another matter.
 
SEC requires a reciprocal compliance agree with the regulator of the other country - otherwise no retail securities. We have it with numerous countries, CFTC has an agreement with Korean regulator on CFTC regulated products. Easy to execute it on indicies - a bit tougher on stocks.
Some markets, like the Canadian CSE allows qualified investors and institutions.
 
The SEC has a list on their site. They did execute a reciprocal discussion agree with Korea in 06, but no reciprocal trading agreement. No enforcement cooperation - no trading.




Cooperative Arrangements with Foreign Regulators



Cooperative Arrangements Fact Sheet

Argentina (December 9, 1991)
  • Canada (January 7, 1988; September & October 2015)
  • Germany (November 22, 1993; March 24, 1994; October 17, 1997)
  • Italy (May 3 & 5, 1993)
  • Japan (May 23, 1986; May 17, 2002; January 12 & 16, 2006)
  • Switzerland (August 31, 1982; November 10, 1987; November 3, 1993)
EBA Framework Cooperation Agreement (September 2017)
  • Canada (June 2010; September 2011; September & October 2015)
  • Belgium (June 29, 2006, and July 6, 2006)
3. Data Protection:
Argentina (December 9, 1991)
  • Egypt (February 11, 1996)
  • Russia (December 5 & 6, 1995)
Press Release
 
Thanks I didn't know that as I was of the understanding foreign brokers couldn't solicit in the US but a US regulated broker could have an arrangement to route to any equity market it pleased for listed securities in non-FATF countries. Regardless, getting the Investor Registration Certificate for a retail participant makes it impractical, hence SSFs are the way to go.
 
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