To ease the margin burden of qualified institutional investors*, the KRX has amended the cash margin requirement of the Derivatives Market.
Under the existing market regulations, the qualified institutional investors are subject to ex-post margin and required to pay at least 1/3 of net exposure margin to be deposited with the securities and futures company and the total amount of settlement variation in cash.
After the amended margin requirements is put into effect on June 28, 2010, the securities and futures companies are allowed to establish their own ratio of net exposure margin that the qualified institutional investors must pay in cash. Accordingly, the qualified institutional investors may pay the total amount of net exposure margin with the substitute securities or foreign currency. However, the total amount of settlement variation must still be paid in cash. (KRX)
* Of the institutional investors pursuant to the Financial Investment Services and Capital Market Act, those institutional investors that the securities and futures companies deem to have sufficient capacity to fulfill their settlement obligations.