As the domestic on-exchange derivatives market marks its 30th anniversary, a recommendation emerged to push ahead with benchmark rate reform, product diversification, and institutionalization of digital assets in response to changes in the financial market environment.
Hwang Sung-yeob, president of the Korea Financial Investment Association, said in congratulatory remarks at the policy symposium titled "30 years since the introduction of on-exchange derivatives: achievements, current issues, and preparing for the next 30 years," held at the Yeouido Financial Investment Center in Yeongdeungpo-gu, Seoul, on the 2nd, "Our on-exchange derivatives market has faithfully served as the 'blood vessels of the capital market,' absorbing the volatility of the cash market and supplying liquidity," adding, "At the association level, we will actively support the derivatives market so it can take a leap forward over the next 30 years."
Kang Byung-jin, president of the Korean Derivatives Association, also noted, "Over the past 30 years, the derivatives market has played an important role as core infrastructure of the financial market amid various economic shocks, including the IMF foreign exchange crisis, the global financial crisis, and COVID-19," emphasizing, "In the face of new changes in the financial environment such as AI and digital assets, discussion is needed on the role of the derivatives market and its future development direction."
Yoon Sun-jung, a professor at Dongguk University who delivered the first keynote presentation, said, "Derivatives induce a virtuous cycle in the capital market and maximize consumer utility," presenting benchmark rate reform as a pressing task. Yoon argued, "We need to accelerate the transition from the convention centered on CD rates to an OIS market based on the Korea Overnight Financing Repo rate (KOFR) that reflects actual market supply and demand."
Han Seo-hee, an attorney at Lee & Ko who delivered the second presentation, examined the domestic derivatives regulatory framework and the feasibility of introducing cryptoasset-based derivatives, comparing cases in the United States and Japan.
In the subsequent panel discussion, experts from government, academia, and industry took part to discuss the direction of changes in market structure.
Kim Ki-dong, an executive director at the Korea Exchange (KRX), presented diversification of options products as a growth engine for the K-derivatives market. Kim explained, "In line with the government's carbon neutrality policy, we will list carbon emissions futures next year, and once the regulatory framework for digital assets is established and a domestic price benchmark index is developed, we also plan to prepare for listing digital asset futures."
Seo Byung-gi, a professor at UNIST, emphasized that liquidity and the exchange's trust infrastructure are important to expand the on-exchange derivatives market. Seo said, "Recently, the role of exchanges has expanded beyond simply listing products to forming market standards and infrastructure based on liquidity and trust," adding, "It is necessary to introduce flexible experimental systems such as a 'pilot platform' that can test-list new futures products within a certain scope to verify trading demand and liquidity in advance."
Hwang Hyun-chul, a professor at Hongik University, emphasized the need for consistency in policies to protect derivatives investors and a paradigm shift toward institutionalizing crypto assets. Hwang suggested, "When introducing STOs and crypto asset derivatives, the existing principle of 'separation of finance and virtual assets' needs to be reestablished," adding, "Rather than binary regulation, crypto assets should be selectively incorporated into the traditional risk management framework, and existing operators should also be given opportunities to participate so the industry can be nurtured."