Korea tightens autocall oversight as local houses take on risk

Regulator sounds warning over $9 billion increase in structured product self-hedging by Korean firms


South Korean securities houses are hedging more autocall issuance themselves instead of outsourcing risk management to foreign banks, according to recent market data. The shift is one reason the country’s financial regulator now plans to step up supervision of the market.

Dealers say that growing risk management and trading expertise at Korean houses has allowed the firms to retain a larger share of risk from an autocall market that has seen record issuance in 2018, while eschewing spiralling

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