Hantoo, Hana Financial Investment, and SK Securities as Carbon Emission Trading Market Makers
Promotion of Allowing In-House Proprietary Asset Management Within the Year
[Asia Economy Reporter Minwoo Lee] Following two policy banks, Korea Development Bank and Industrial Bank of Korea, three securities firms?Korea Investment & Securities, Hana Financial Investment, and SK Securities?will participate as market makers in the emission trading market.
The Korea Exchange announced on the 16th that the three securities firms will additionally participate as market makers in the emission trading market starting from the 17th. Through this, they plan to continuously provide bid and ask quotes for emission allowance items, thereby enhancing the market's price discovery function and liquidity.
Market makers are required to submit two-way quotes with a bid-ask spread of 500 won or less (10 ticks) for more than 30 minutes daily and submit a cumulative quote volume of over 3,000 tons. Since June 2019, two policy banks, Korea Development Bank and Industrial Bank of Korea, have participated as market makers in the emission trading market.
Within this year, plans are underway to gradually expand securities firms' participation by allowing them to operate their own proprietary assets (proprietary trading) in the emission trading market. Currently, only allocation companies (enterprises) with actual demand purposes can participate. This initiative is also intended to contribute to the government's '2050 Carbon Neutrality Promotion Strategy.'
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A Korea Exchange official stated, "With securities firms that have accumulated market-making know-how in the securities market participating and supplying abundant liquidity to the emission trading market, the market will be revitalized," adding, "The participation of securities firms as market makers will lead to the formation of reasonable carbon prices in the emission trading market, greatly contributing to the government's greenhouse gas reduction policies."
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