SEC Division of Corporation Finance no-action letter: The Korea Exchange

Mr. John W. White
Director
Division of Corporation Finance
Securities & Exchange Commission
450 Fifth Street, N. W.
Washington, D. C. 20549
U. S. A.
Re: Application for Designation of the Korea Exchange, Inc. as a “Designated Offshore Securities Market.” Dear Mr. John W. White:
On behalf of the Korea Exchange, Inc. (the “KRX”), I am pleased to submit to the Securities & Exchange Commission (the “Commission”) an application for designation of the KRX as a “Designated Offshore Securities Market” within the meaning of Rule 902(b) of Regulation S under the Securities Act of 1933, as amended (the "Securities Act"). I am seeking this designation and recognition to permit the resale of securities listed on the KRX in transactions effected in, on, or through the facilities of the KRX in reliance on the safe harbor from the registration requirements of the Securities Act provided by Rule 904 of Regulation S. As discussed below, the KRX has the attributes specified in rule 902(b)(2) of the Regulation S. Moreover, the Stock Market of the KRX is the successor to the KSE, which was already designated by the Commission as a “designated offshore securities market” in September 2000 (see Appendix I). Therefore, I respectfully submit that the designation of the KRX as a designated offshore securities market is appropriate Introduction to the KRX Incorporation and Ownership To promote the stability and efficiency of the Korean securities and futures markets, the former three exchanges in Korea, namely the KSE, the Korea Securities Dealers Association Automated Quotation Stock Market Inc. (the “Kosdaq”) and the Korea Futures Exchange, demutualized and, together with the Kosdaq Committee, which was the regulatory body of the Kosdaq, merged into the KRX on January 27, 2005 pursuant to the Korea Securities & Futures Exchange Act. The KRX is a for-profit stock corporation and an integrated exchange, where the former KSE, Kosdaq and the Korea Futures Exchange now operate as three market divisions of the KRX, i.e., the KRX Stock Market, the KRX Kosdaq Market, and the KRX Futures Market (each a “KRX Market” and collectively, the “KRX Markets”). The KRX Stock Market succeeded the KSE as a capital market for the government and corporations with capital of over 5 billion Korean Won; the KRX Kosdaq Market succeeded the Kosdaq as a capital market