Requirements for Eligible Collateral
The KRX sets the requirements for eligible collateral to prevent troubled assets from being accepted as collateral. Eligible collateral means collateral assets with sufficient stability and liquidity. Through the eligible collateral requirements, the KRX secures sufficient collateral value in case of an emergency.
List of Eligible Collateral

Eligible collateral includes cash, foreign currencies and substitute securities as follows:

< Acceptable Cash and Collateral >
Classification Acceptable Means
Cash Korean Won currency and banker’s checks
Foreign currencies 10 major currencies including US Dollar, Japanese Yen, Euro, British Pound, Hong Kong Dollar, Australian Dollar,
Singapore Dollar, Swiss Franc, Canadian Dollar and Chinese Yuan

In OTC market: 9 currencies above except Chinese Yuan

Substitute
Securities
Bonds
  1. Public bonds: KTBs, municipal bonds, MSBs, and agency debt securities
  2. Corporate bonds: listed debt securities
  3. Foreign bonds: US government bonds (T-bills, T-notes, T-bonds)
Stocks, etc. Listed stocks, listed KDRs, DRs, etc.
Beneficiary Certificates Stocks of unlisted investment companies, assets of investment trusts, ETFs, ETNs, etc.

However, not all substitute securities are accepted as collateral. In the derivatives market, administrative issues, liquidation issues, suspended issues, investment risk issues, and investment alert issues are excluded from the eligible collateral. In case of OTC KRW IRS clearing, those substitute securities with highly fluctuating collateral value and/or restriction in liquidity may not be deemed eligible for substitute securities.

Content Manager
  • CCP Risk Management 051-662-2742