Korea Exchange has signed a cross-listing agreement with Eurex Exchange, the largest European derivatives exchange, on Wednesday to offer daily futures on Europe’s key stock index for trading on the local bourse. 

Under the deal, won-denominated futures on Euro Stoxx 50, the leading blue-chip index for the eurozone, will be traded on the local bourse from June. Futures on Mini KOSPI 200 will be available on Eurex, owned by Deutsche Börse, after Korean trading hours, from November.

Futures on Euro Stoxx 50 have a growing market in Korea, with nearly 90 percent of all equity-linked securities issued in Korea last year linked to the index.

“This cross-listing plan is an advanced business model that can satisfy investment demands for the respective markets. And is a milestone for Korea Exchange to transform as a global bourse operator,” Choi Kyung-soo, chairman and CEO of KRX told reporters after signing the contract.

The won-denominated Euro Stoxx 50 index futures is expected to provide trading opportunities to local investors with less exposure to currency risks and lower transaction fees, KRX said.

“Listing of Mini KOSPI futures would be the next complimentary step for risk management purposes and trade hedging purposes as we already successfully launched contracts based on KOSPI stock-index options,” said Jeffrey Tessler, CEO of Clearstream and a member of the executive board of Deutsche Börse.

The agreement comes as stock exchanges in major economies forge similar cross-listing contracts to boost liquidity and access new market participants.

In 2010, Eurex started trading KOSPI 200 options, making trading in KOSPI products possible after markets close in Korea.

By Park Han-na (hnpark@heraldcorp.com)