Korea autocallables under threat from draft rules

Autocallable volumes could suffer as mis-selling fallout spreads to equity-linked structures

South Korea’s structured products market faces disruption over a mooted rule change that could slash volumes of equity autocallables by a predicted 30–40%.

Dealers say local regulators are planning to ban the sale of autocallables in trust format and force issuers to repackage the instruments as funds, following a mis-selling scandal that caused heavy losses for retail investors in rates-linked products.

Such a move would hit revenues for Korea’s securities houses and private banks, which are