MoEF "Introduction of 30-Year Government Bond Futures, Listing in Q1 2024"
Exchange, Korea Financial Investment Association, and Government Bond Specialist Dealers Form Consultative Body
[Asia Economy Sejong=Reporter Kim Hyewon] The government, which is promoting the introduction of 30-year Treasury bond futures, has decided to pursue listing in the first quarter of 2024.
On the 18th, the Ministry of Economy and Finance held a "Meeting for the Introduction of 30-year Treasury Bond Futures" and explained this plan to the Korea Exchange, the Korea Financial Investment Association, and specialized Treasury bond dealers, gathering their opinions.
Treasury bond futures are futures products based on Treasury bonds as the underlying asset, used to hedge against future price fluctuation risks (interest rate risks) of Treasury bonds.
The 30-year maturity Treasury bond (30-year Treasury bond) has seen an increase in issuance volume since its initial introduction in September 2012, supported by demand for ultra-long-term bonds from insurance companies, currently recording the highest issuance volume among single maturities.
However, due to the absence of ultra-long-term Treasury bond futures, financial institutions have faced difficulties in managing interest rate risks, leading to market demand for the introduction of 30-year Treasury bond futures.
The Ministry of Economy and Finance plans to continuously discuss the introduction of 30-year Treasury bond futures by forming a consultative body consisting of market participants such as the Korea Exchange, the Korea Financial Investment Association, specialized Treasury bond dealers, insurance companies, and related research institutions, starting with this meeting.
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The consultative body will operate regularly every month to focus on key product details and measures to expand actual demand, such as regulatory improvements to ensure the 30-year Treasury bond futures quickly settle in the market, and plans to secure initial liquidity through specialized Treasury bond dealers. Based on this, detailed product design, related regulation amendments, and system construction by the exchange will be carried out to promote the listing of 30-year Treasury bond futures within the first quarter of 2024.
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