South Korea prepares for EU benchmark equivalence

New regulatory framework aims to allow European firms to continue using local benchmarks

South Korea is tightening its rules on financial benchmarks in a likely bid to seek equivalence with new European laws overhauling index supervision. The move would enable European entities to buy and sell securities linked to benchmarks in Asia’s fourth largest economy after 2020.

Korean indexes such as the Kospi 200 are an important part of structured products sold by European banks to Asian investors. The Kospi has also been a popular underlying of corridor variance swaps for hedge funds and