Millennium Partners, a fund managed by the U.S.-based Millennium Management LLC, is considering tapping the South Korean hedge fund market, sources said Monday, in what would mark the first local entry of an overseas fund. Millennium Partners, which manages funds valued at around US$13 billion, reportedly plans to set up a local affiliate and seek regulatory approval as early as this month in a bid to operate its hedge fund here. \"The regulator has been in talks with the company, although an official document for approval has not been submitted yet,\" said an official at the Financial Services Commission (FSC), declining to elaborate because the details have not been finalized. In order to receive a regulatory permit, the affiliate should have an equity capital of over 6 billion won (US$5 million), a track record of a hedge fund larger than 1 billion won at its parent company and a professional workforce consisting of more than three members. Seoul has been stepping up efforts to expand the finance industry by introducing hedge funds and investment banks in hopes they will inject liquidity into the local market via robust arbitrage trading. Previously, South Koreans were only allowed to invest in hedge funds overseas. Last month, the FSC gave the green light to the establishment of the country\'s first 12 homegrown hedge funds operated by nine asset managers, including Mirae Asset Global Investments Co. and Shinhan BNP Paribas Asset Management Co. In an earlier interview with a local media outlet, FSC Chairman Kim Seok-dong reaffirmed his plans to nurture the local hedge fund market, adding that one foreign company will enter the local hedge fund market this month.