KMB leads the development of Korea's derivatives market by expendingits service areas through a strong network with domestic and foreign financial institutions.
The local derivatives market was initially dominated by foreign brokers located abroad such as Hong Kong or Singapore.In 1996 KMB became the first domestic broker to launch derivatives broking services, and has since spearheaded the development of the nation's
derivatives market with diversified products including IRS, CRS and FRA.
Building on a very tight network with institutional customers home and abroad, we continue to make investment to hireand nurture extremely competent brokers equipped with strong expertise and adopt latest broking system.
Our commitment to the best broking services will remain unchanged in
order to provide precise index rates and maximize efficiency in the market.
Interest Rate Swap (IRS) is a contract where two parties agree to exchange interest cash flows on a notional principal of thesame currency during the term of the agreement. Being used to hedge changes in interest rates, IRS has some variations such as"coupon swap" - exchanging a fixed rate for a floating rate (or vice versa) - and "basis swap" - exchanging a floating rate foranother with different tenors.
KRW Deliberable IRS (Compulsory liquidation via KRX until plain vanilla swap of 20 years in unit of 3 months)
KRW Non-Deliverable IRS (In voluntary liquidation through LCH, CME, etc.)
USD IRS (In voluntary liquidation through KRX)
1, 2, 3, 4, 5, 7, 10, 12, 15, 20, 25 and 30 years & odd tenor
KRW 10 billion
KRW 10 billion in minimum transaction size
Fixed rate (KRW) expressed in percentage
To 4 decimal places
3 months in principle, but 6 and 12 months, etc. also negotiable
Currency Swap (CRS) is an agreement involving the exchange of principal amounts in one currency for another at the beginningand end of the contract. The two parties exchange interest payment during the life of a swap and re-exchange the principal amountat maturity based on the rate at which the principal was exchanged at the beginning of the contract. The main use of CRS is toprovide a mid- and long-term hedge against currency risk and interest rate changes.
6 month LIBOR in principle, but 3 and 12 months, etc. also negotiable
FRA is a derivative instrument designed to hedge future interest rate movement or take speculative profits.Two parties of the agreement exchange fixed and floating interest payment on a certain principalamount during a specified future period of time.
3 months from a certain point of time in the future1*4, 2*5, 3*6, 4*7, 5*8, 6*9, 9*12 months & odd tenor