Interactive Brokers Unlocks Korea's $1.8 Trillion Market, Intensifying Broker Wars

Interactive Brokers' launch of direct access to the Korea Exchange opens up a $1.8 trillion, high-volume market for global investors, challenging competitors like Robinhood and Schwab to match its expanding international footprint. The move makes the automated global broker the first major US-based firm to offer seamless trading in Asia's fourth-largest equity market.

"Korea is one of Asia's most dynamic equity markets, and access to the KRX enables our clients to more comprehensively manage their Asian exposure," said David Friedland, Managing Director for Asia Pacific at Interactive Brokers. "This launch is a natural extension of our mission to continually expand market access, ensuring our clients can seize investment opportunities wherever they exist."

The new offering provides access to over 1,800 listed securities, including category-leading technology and automotive firms like Samsung Electronics, SK Hynix, and Hyundai Motor. The Korean market boasts liquidity comparable to many European exchanges, with over $10 billion in daily trading volume. The launch was facilitated by a partnership with Samsung Securities, which piloted an integrated account service for foreign investors.

For investors, this simplifies entry into a key Asian market that has historically been difficult to access. For Interactive Brokers (Nasdaq: IBKR), it establishes a significant competitive advantage and a new avenue for user growth as the battle for client assets intensifies among global brokerage platforms.

A Race to Simplify Korean Market Access

Interactive Brokers' entry comes as South Korea actively works to attract more foreign capital. While an "integrated account" system allowing foreigners to trade without a local account was introduced in 2017, it saw no real usage until IBKR's partnership with Samsung Securities broke the ice. Now, major Korean firms like Mirae Asset Securities and NH Investment & Securities are rushing to launch similar services.

This push is amplified by new regulations. As of May, companies with assets over 2 trillion won must provide disclosures in English, removing a significant barrier for international investors. These efforts are crucial, as foreign ownership in the Korean market sits in the low 20 percent range—well below Japan's 68 percent and Taiwan's 35 percent, according to Hana Securities. Analysts project the improved accessibility could drive substantial new capital inflows, particularly with the Korean stock market's operating profit forecast to grow 182.5% this year, led by the semiconductor sector.

Brokerage Giants Vie for Global Reach

The move is part of a broader trend of brokerage firms diversifying their offerings and expanding globally to capture new revenue streams. While Interactive Brokers, which trades at a price-to-tangible book value of 1.63, is planting its flag in Korea, its rivals are making different strategic bets.

Robinhood (Nasdaq: HOOD), despite recent struggles with its crypto-dependent revenue model, is aggressively expanding its product suite with offerings like the Robinhood Platinum Card and pushing into new regions like Singapore and Europe. However, with its stock trading at a high P/TB of 7.60, investors remain cautious.

Meanwhile, Charles Schwab (NYSE: SCHW) is focusing on integrating private market capabilities through its acquisition of Forge Global and is also entering the crypto space. Both Schwab and IBKR have been consistently broadening their product suites, with Interactive Brokers recently adding European index options and crypto staking to its platform. IBKR's launch in Korea, however, represents a direct and significant expansion of its core equity market access, a move that sets it apart in the current competitive landscape.

This article is for informational purposes only and does not constitute investment advice.