* Targets 5 pct share of South Korean market in 3-5 yrs
* U.S. bank reform could help smaller players elsewhere
* South Korea futures trading jumps so far this year
By Yoo Choonsik
SEOUL, Feb 4 (Reuters) - The South Korean unit of Newedge, a brokerage jointly owned by two French banks, aims to grab about 5 percent of the country's growing financial derivatives market over the next three to five years, a senior executive said.
Newedge also expected a futures trading license that it recently obtained from the local authorities to boost its business with investors within the country in overseas financial derivatives markets, Kevin Lee, managing director at the Seoul branch of Newedge Financial HK Ltd told Reuters in an interview on Thursday.
"We are targeting about a 5 percent share over the next three to five years in terms of major products," he said. "(The South Korean derivatives market) is still small compared with the country's economic size and investors from inside and outside have a strong interest in investing in the country."
Newedge, jointly owned by Societe Generale and the investment banking arm of rival Credit Agricole, recently became one of only a handle of foreign brokerages awarded futures trading licences by South Korea.
It recently increased staff to 23 from 18 to strengthen its business in the country, Asia's fourth-largest economy, which aims to strengthen its financial industry as the next major source of economic growth.
"As there are about 50 companies trading in futures; the 5 percent target is an ambitious one," he said.
Since the beginning of this year, Lee said, futures trading had already jumped in the face of heightened volatility in financial markets and amid growing interest among investors in derivatives products.
"Traditionally, January is a very quiet period. We call it successful if (trading volume in) January reaches two-thirds of the annual average. This year, we saw January volume even higher than last year's average," he added.
In South Korea, stock price index futures, treasury bond futures and U.S. dollar/won futures are among the most active derivatives products. Official data showed trading volume for these in January was higher than the average for last year.
Lee said moves by the U.S. government to reform its banking regulation mechanism and toughen supervision on derivatives investments by banks could help smaller financial services firms elsewhere narrow the gap with Wall Street giants.
"There won't be anything like outright benefits from the move, but it could help other players (outside the United States), such as those in this country, spur their existing efforts to catch up," Lee added.