Published On: Sun, Apr 28th, 2013

Japan Exchange Group & Korea Exchange Sign a Letter of Intent

Atsushi Saito, JPX Group CEO

Atsushi Saito, JPX Group CEO

On April 24 the Japan Exchange Group, Inc. (JPX) and Korea Exchange Inc. (KRX) signed a Letter of Intent (LOI) to aim for listing TOPIX Options on KRX. Moving forward, both parties will make preparations for the listing of Korean won-denominated TOPIX Options on KRX.

TOPIX is a free-float adjusted market capitalization-weighted index that is calculated based on all the domestic common stocks listed on the First Section of Tokyo Stock Exchange, Inc. (TSE), a subsidiary of JPX. TOPIX Futures and Options listed on TSE are actively traded mainly as effective hedging tools against Japanese stock portfolio.

KRX has one of the most active derivatives markets around the globe. Listing TOPIX Options on KRX will provide Korean investors with new access into Japanese market. It is also expected to improve price transparency and efficiency of the market through arbitrage transactions between both countries.

Mr. Atsushi Saito, CEO of Japan Exchange Group, commented “We are very pleased to have concluded the letter of intent with KRX. Both exchanges have kept discussing possible business collaborations based on the MOU signed in 2011. This LOI is intended to deepen our continuous relationship further and start working on a detail study of listing TOPIX Options on KRX. Building up close partnerships between two leading exchanges in Asia will contribute to the further development of capital market in both countries.”

Mr. Bong Soo Kim, Chairman & CEO of Korea Exchange, commented “In the rapidly evolving global exchange environment, cooperation and coordination between global exchanges are becoming increasingly important as a strategic toward growth. In particular, our cooperative agreement with JPX Group will expand capital flow between our countries through the creation of leading capital market network in Asia and enhance the competitiveness of both our markets. We look forward to the boost that this relationship will provide to inter-regional exchange cooperation”.

JPX and KRX announced “Business consultation between both exchanges goes as planned, in 2014, TOPIX option can be traded on KRX market.”

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