ESG is no passing fad, as more investors are convinced that alpha can be found in ESG and regulators continue to introduce rules to lift ESG standards.
The product is owned by Instinet, with Samsung Securities acting as local broker sponsor and providing clearing and settlement services as well as domestic order flow.
The engine, which covers longs and shorts, operates as a æblackboxÆ pre-market VWAP (volume weighted average price) cross, matching buyers and sellers on a daily basis at 8.30am. It is InstinetÆs ninth crossing system, and in Asia it already operates JapanCrossing and CBX Japan.
Dark pools are gradually coming to South Korea. Credit Suisse introduced its æCrossFinderÆ crossing engine there in 2007.
Implementing dark liquidity systems into AsiaÆs regional markets has to be done on a country by country basis, because each one has its own rules and regulations. In South Korea, there are minimum crossing amounts and price spread limitations. Furthermore, crossed trades in Korea need to be reported manually at the end of each day, compared, say, to Hong Kong, where trade reports are automatically generated.
"The Korean market is an expensive one in which to operate," says Christian Chan of Instinet. "This is due to its lack of anonymity, and because the market impact costs are about double that of Hong Kong and Japan, many have not traded to the degree in which they'd like. The ability to execute large blocks through KoreaCross with zero market impact should make it much more appealing to them."
Crossing engines will assist in the growth of local hedge funds, many of which operate from outside KoreaÆs borders, he says. There are currently about 30 hedge funds that are Korea-focused, with more coming soon. 260 stocks on Kospi can currently be shorted. Two years ago it was a fifth of that number.
It is far from easy to start a hedge fund in Korea, with stringent capital and reporting requirements, but there have been signs from the local authorities that the regulatory burden will be eased sometime during the course of this year.
AsianInvestor reveals the first half of our marquee winners for this year's Asset Management awards, including best asset service provider and top alternative fund houses.
The number of millionaires in mainland China grew by 35% in 2020, while the number of millionaires in Hong Kong fell by 7%, according to a new report from the private bank.
The Australian pension fund joins other asset owners in eyeing private credit opportunities in the Asia-Pacific region, although liquid defensive assets retain a majority of allocations.
What can asset managers and other stakeholders in the country do to further drive sustainable investing, particularly among smaller asset owners, in the country?