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New Rules to Boost Transparency in CFD Transactions

Written: 2023-08-31 15:32:14Updated: 2023-08-31 15:39:34

New Rules to Boost Transparency in CFD Transactions

Photo : KBS News

The Financial Services Commission said Thursday that new rules will be implemented to boost transparency and protect individual investors related to CFD or contracts for differences, which are derivative products that allow investment in the risk of price fluctuations of stocks without actually having to own shares.

The agency said that from Friday, the type of investors in CFD-related transactions, whether it be individual, institution or foreigner will be specified in the stock exchange system.

Also, the CFD balance will be disclosed and can be checked every day after trading closes on the Korea Financial Investment Association's portal website.

CFDs have been regarded as the epicenter of a recent stock price crash incident involving mass sell-offs through SG Securities Korea, the local branch of the Societe Generale Group of France.

Domestic securities firms have been cautiously resuming CFD transaction services in recent days following a suspension, with five out of 13 companies where the services used to be available finalizing a resumption date.

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