Barclays’ decision to be ‘more selective’ about the clients to which it provides futures brokerage service in South Korea will limit the offer of the country’s structured products providers, according to market sources.

Barclays countered local press reports that it had stopped providing futures brokerage to South Korean distributors, with a source at the HK bank saying it was limiting its audience. “We are trading actively with other providers in the market, however, since last year there was no supplies from Barclays,” said a senior source at NH Investment & Securities, one of the largest distributors of structured products in South Korea.

An equity swaps banker at Shinhan Investment said it was still using Barclays for swaps, “however, I understand that the over-the-counter (OTC) market, especially the futures side, has been hampered due to a number of issues in the market during the last few months.”

The new policy at Barclays is part of a reorganisation following a strategic review it announced in 2014, with the bank becoming more selective in servicing offshore futures brokerage services for South Korea distributors, said the source at Barclays. “Under the new regulatory regime, in addition to the strategic review we have had since 2014, we are now evaluating our clients by risk and return profile to offer the best service as we can globally,” said the Barclays source.

“As a result, during the process of executing the performance metrics to every clients, we were no longer able to offer the same service to our past clients who used to enjoy certain services by us,” said the source. “Therefore, we have been gradually working to reduce our offers and give our clients time to look for other counterparties over the last few months, and serve better other clients who align well with our risk and return metrics. We are not pulling out of futures clearing, and we will still actively offer our service to certain clients.”

UBS, Societe Generale, Credit Suisse and Standard Chartered are active as derivatives counterparties in South Korea, and JP Morgan, Macquarie Bank, and Nomura have been active in South Korea last year, according to the SRP database.

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