Korean Home Traders Can Deal in U.S. Stock Market

Domestic individual stock investors can deal the stocks and mutual funds of the U.S. stock market through the home trading system (HTS) from March 30th.

Therefore, Korean investors` investment in the U.S. stocks, which has been allowed with restrictions, will be possible in real time, and the illegal investment that has been violated the foreign exchange control regulation will be legalized. The `global investment age` will be opened. Moreover, the direct investments in European and South Asian stock markets are expected in the future.

Park Dae-Hyuk, President of the Leading Investment & Securities Co. (LIS), and Roh Hoon-Gun, President of the Korea Securities Depository (KSD), had a signing ceremony with Bread Ekenwayler, Chairman of the Midas Trading Securities Co. (MTS), and Kenneth Ropean, Senior Vice President of the New York Bank, to operate a real time trading system of the U.S. stocks, in New York, on 28th.

Through the HTS, Korean investors can deal the U.S. stocks of △the New York Stock Exchange, including Nasdaq △the American Stock Exchange (AMEX), the second stock market of the U.S. △the Electronic Communication Network (ECN). They also can deal the depository receipt (DR) that Korean companies issued in the U.S.

After opening an account at the LIS and installing an exclusive software, a domestic investor can deal stocks during the U.S. market hours (9:30 a.m. to 4:00 p.m. in eastern time, 11:30 p.m. to 6:00 a.m. in Korean time). Beside the LIS, other domestic security corporations are also preparing the dealing systems for the U.S. stocks.

If one buys the U.S. stocks, the buyer`s wons in an account will be transferred as dollars, and the stocks will be deposited at the New York Bank. The LIS pays the transferring fees. If one sells stocks, money will be transferred into one`s domestic account after four days, and one can have the money either wons or dollars. In case of exchange, a premium exchange rate will be applied. The MTS will execute stock dealings for the customers, and the KSD will handle the dividend and subscription for a capital increase.

Internet day trading, as one does in Korean stock market, is also possible.

President Park Dae-Hyuk said, “Deepening the identification of the U.S. and Korean stock markets, many investors want to deal the U.S. stocks. We are happy to furnish a legal and reasonable investment method. We will provide materials of the market analysis and real time news for the individual investors who are not familiar to the U.S. market.”

President Roh Hoon-Gun said, “According to a demand forecast, 18,000 accounts are expected to open for the U.S. stock investment, and day trading will be activated.”

konihong@donga.com