Korean Exchange (KRX)

Korea Exchange, Inc., Asia 50 Jungang-dong 5-Ga Jung-gu, Busan, 600-015 Republic of Korea Tel:+82 51 662 2000 Fax: +82 51 662 2478 Web address: www.krx.co.kr Email contact: Hyangmi Lee (hm.rhee@krx.co.kr) Established: Korea Exchange was established in 2005 Type: Electronic trading

Brief history

Contracts: -

The KRX trades equity products, financial derivatives, currency derivatives and interest rate products, and commodity derivatives all on electronic platforms. For detailed contract specifications visit www.krx.co.kr

Derivatives products listed on the KRX Futures Market

Underlying Asset	Listed Products
Equity Index	KOSPI 200 Futures KOSPI 200 Options KOSDAQ Star Futures
Individual Equity	Equity Options
Interest Rate	3-year KTB Futures 5-year KTB Futures 10-year KTB Futures MSB Futures
Currency	US Dollar Futures US Dollar Options Japanese Yen Futures Euro Futures
Commodity	Gold Futures

ACCESS TO FUTURES MARKETS FOR FOREIGN INVESTORS:

To trade the futures and options products listed on the KRX, a foreign investor must designate a custodian bank (standing proxy) through the custodian bank agreements and standing proxy agreement, which undertake the various tasks relating to futures and options trading on behalf of the foreign investor.

A custodian bank as a standing proxy opens the accounts with a bank offering a foreign exchange service and with a futures company (or a securities company) for futures and options trading. On behalf of its customer, the custodian bank deposits and withdraws the investor's money and oversees the investors' assets. A foreign investor should designate a bank for foreign currency exchange and fund transfer by entering into a foreign currency exchange agreement. Most banks providing the foreign exchange service are able to act as a custodian bank and standing proxy.

No restrictions on foreign investors

No restrictions are placed on foreign investors wishing to trade the derivatives products listed on the KRX.

KRX MEMBERSHIP

The KRX membership is open to a foreign company. Before applying for the KRX membership, the foreign companies must obtain the permission to conduct futures business in Korea from the Financial Supervisory Commission (FSC).

Categories of Membership

Members of the KRX are grouped into the Securities Trading Members and Futures Trading Members based on the market in which they participate. Then, according to the settlement authority granted to a member, the Securities Trading Members and Futures Trading Members are further categorized as follows :

(1) Clearing member : A member who is authorized to settle all trades entrusted by non-clearing members and trades conducted in its own name.

(2) Non-clearing member : A member who must entrust the settlement of trades conducted in its name to a clearing member.

Korea Exchange Inc., established in January 2005 through the merger of the Korea Stock Exchange (KSE), the Korea Futures Exchange (KOFEX), the KOSDAQ Market, and the KOSDAQ Committee, is the sole exchange in the Republic of Korea. The KRX operates the centralized securities and derivatives markets where stocks, bonds and derivatives are traded on a common platform. To best serve its clients, the KRX provides its customers with the full access to both cash and derivatives markets, and clears and settles all transactions on its markets as one-stop service. KRX offers diverse derivatives products primarily in four areas: stock index, bond/interest rate, currency and commodities. According to the 2006 statistics compiled by Futures Industry Association, KOSPI200 options is the most heavily traded one in the world in terms of trading volume with 2.4 billion contracts.

Korea Exchange, KRX, Kospi, Kospi200 are registered trademarks of Korea Exchange Inc. Further information about KRX and its products can be found at www.krx.com