Kiwoom Securities Expands "Foreign Stock FX Hedging Product" to General Investors

Launched Last Month for Individual Professional Investors

Enhanced Investor Protection with Suitability and Appropriateness Checks

Kiwoom Securities is expanding the eligibility for its "Foreign Stock FX Hedging Product for Individual Investors" service to include general investors.

On April 10, Kiwoom Securities announced, "We will enable more individual investors to directly utilize foreign exchange risk management tools, which have so far been regarded as exclusive to institutional investors."

This product allows customers to fix a portion of the appraised value of their foreign stocks at a contracted exchange rate for a specified date in the future. It is designed to help manage the risk of exchange rate fluctuations that may arise when investing in overseas assets.

Previously, Kiwoom Securities launched this product last month for individual professional investors. Since it was not a universally available product, it was initially operated only for professional investors to ensure market stabilization and sophisticated risk management.

After enhancing the product structure and investor protection system, the company expanded eligibility to include general investors. For general investors, Kiwoom Securities applies additional steps such as financial product suitability and appropriateness checks, as well as thorough product explanations.

The product structure remains unchanged. Customers can apply for up to 50% of the appraised value of their foreign stocks (based on the previous day's closing price), which is then fixed at the contract exchange rate announced by Kiwoom Securities. At the maturity settlement (or early termination) date of the hedged amount, the profit or loss is calculated as the difference between the predetermined contract exchange rate and the settlement exchange rate on the settlement date, and is converted into U.S. dollars and settled into the customer's deposit account.

A representative from Kiwoom Securities stated, "Since fluctuations in exchange rates and underlying asset prices may result in losses exceeding the invested principal, it is important to fully understand and utilize the product structure."

Tax benefits remain the same as before. Under the amended Restriction of Special Taxation Act and the Special Act on Rural and Fishing Villages Tax, 5% of the investment amount in FX hedging products will be deducted from this year's capital gains from foreign stocks. The deduction is capped at KRW 5 million per individual. The investment amount for FX hedging products is calculated as the average amount held, divided by the number of days the product was held. The maximum eligible amount is based on the appraised value of foreign stocks held as of December 23 of last year.

A representative from Kiwoom Securities commented, "Through this expansion, more investors will be able to systematically manage foreign exchange fluctuation risks," adding, "We will continue to prioritize investor protection and introduce innovative financial services in line with government policies."

This content was produced with the assistance of AI translation services.