The KRX provides four different trading platforms for fixed income securities: Korean Treasury Bonds Market(KTS), Small-lot Government and Municipal Bonds Market(SGM), General Bonds Market(GBM) and Repo Market. These markets are open from 9:00 a.m. to 3:30 p.m.
- General Bonds Market (GBM)
- The GBM is a secondary market where all kinds of bonds - government bonds, municipal bonds, and corporate bonds - are traded. The GBM is a typical order-driven market: all orders are queued electronically in the central order book to be executed according to a set of auction principles in which orders are matched based on price and time priority as the same as stock trading. Limit order is the only order type allowed in the GBM and all trades are settled on a netting basis on the trading day (T+0). Bond prices are quoted on a dirty price basis. This means that the price showing includes accrued interests. The tick size is KRW 1 and minimum trading amount is KRW 1,000 in par value.
- Small-lot Government and Municipal Bonds Market (SGM)
- The SGM is a market for government and municipal bonds that are administratively placed to the public. The government and municipal bonds with par value being equal to or below KRW 50 million are required to be traded in the SGM. The bonds that are presently traded in the SGM include the National Housing Bonds, Seoul Subway Bonds, Local Development Bonds and Municipal Subway Bonds, etc. One of the unique features of the SGM is that a group of designated securities firms are required to place bid quotation on a continuous basis to make the market.
- Korean Treasury Bonds Market (KTS)
- The KTS is a wholesale market where the government bond dealers trade government bonds in large amounts (order lot is KRW 1 billion). The bonds traded in the KTS include the Korean Treasury Bonds (KTBs), Monetary Stabilization Bonds (MSBs) and Deposit Insurance Fund Bonds (DIFBs).
Direct participation in the KTS is limited to the government bond dealers licensed by the Financial Services Commission. As of Dec 31, 2015, there were 67 financial institutions (39 securities companies, 28 banks) participating in the KTS.
The KTS makes use of a screen-based trading platform that provides fully computerized procedures from order placements to trade confirmations. Trades concluded in the KTS are settled on the day following the trading day (T+1). Cash settlement is carried out via BOK-Wire(Bank of Korea), while the settlement of securities is transferred through the book-entry system of the Korea Securities Depository.
- Repo Market
- The KRX launched a market for trading Repo (Repurchase Agreement) in February 2002. KTBs, FESBs, MSBs, guaranteed corporate bonds, and non-guaranteed corporate bonds with credit ratings AA or higher are traded in the Repo market using a screen-based trading platform. The settlement schemes are the same as that of the KTS.