Eugene Investment&Futures

Introduction

KRX

The Korea Exchange (KRX) was established under Korea Stock & Futures Exchange Act for the purpose of cost reduction and improvement in investor efficiency. In order to effectively respond to the rapidly changing financial market, KRX was created through the integration of the three existing spot & futures exchanges and Kosdaq Committee, a sub-organization of Korea Stock Dealers Association. The merged exchange is transforming itself from a mere local exchange to an important part of the world's financial markets. KRX is attracting a special attention in the world financial market given that it is the merged exchange of spot and futures markets with significant amount of trading volume.

As of the end of 2003, 1,563 companies are listed in the spot market of KRX as KSE and Kosdaq markets have merged, and the total trading volume has reached 813 trillion won to become the tenth in the world. In the market of futures and options where a total of 19 items are traded, KRX ranks the ninth in the futures trading volume, and takes the lead in option transactions thanks to growing popularity of KOSPI 200 Option.

KRX is organized into five divisions:

Administrative Service Division
Stock Market Division
Kosdaq Market Divisio
Futures Market Division
Market Surveillance Division

Financial Safeguard System

The Deposit which the Customer has made payment...

KRX is a quasi-governmental financial institution and therefore, the government will act within legal guidelines in an event of default. *Each member firms of KRX have established a "Good Faith" fund in event of default. Currently, the fund size is at 100,000,000,000 won. Currently, most of the clients trading KRX products use substitution securities and the cash margin held by firms are only a small part of all margin held by firms.

In the event that the "Good Faith" fund is insufficient, the members of KRX will establish an emergency fund to cover the default. Therefore, "Good Faith" and the emergency fund act as a safety device in an event of default. Also, in event of default, the KRX will allow clients to move their position to a different house.

The cash margin deposited with the member firms is segregated and no margin is actually held overnight by the member firms. All excess margin is held by KSFC, which is a quasi-governmental institution, and margin being used is held by KRX.