S. Korea to create clearing house for derivatives in 2012

SEOUL, Feb. 9 (Yonhap) -- South Korea's financial watchdog said Tuesday the
country will seek to establish a clearing house for derivatives traded over the
counter in 2012 in a bid to reduce risks associated with trading.

A clearing house centralizes the liquidation or settlement of privately-traded
derivative contracts, preventing a default by one trader from leading to a chain
of counterparty defaults.
"The government plans to draw up revisions of related laws in 2010 after
establishing a task force to review cases in developed countries," the Financial
Services Commission said in a statement.
The outstanding value of trade in over-the-counter derivatives amounted to US$4.49
trillion in the first half of 2009, accounting for 0.7 percent of the global
derivative market.
sooyeon@yna.co.kr
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