Korea Securities Depository Youngho Park Managing Director Korea Securities Depository KSD’s Value Added Services April 2012
Feb 25, 2016
Korea Securities Depository
Youngho Park Managing Director
Korea Securities Depository
KSD’s Value Added Services
April 2012
Korea’s Only Central Securities Depositary KSD Korea’s Only Central Securities Depository KSD
Primary market support
Deposit & settlement of securities
KSD Overview
Established in 1974
Offers comprehensive securities services as a core infrastructure of the Korean securities market
Asset management market services
Derivative market services
Cross-border clearing & settlement
Various specialty services as well as traditional services
1996 Securities lending & borrowing service
1999 Tri-party repo service
2004 FundNet service
1994 Cross-border clearing & settlement service
1974 Transfer agent service
Value Added Services
Various specialty services as well as traditional services
Securitieslending &borrowing
Cross-borderclearing & settlement
Tri-partyRepo
Transferagent
FundNet
Central Deposit & Settlement System
KSD Centralized SLB System Process
Central securities depository (CSD) in the role of an SLB intermediary
Intermediary(CSD)
1) Application
4) Credit(+) 4) Debit(-)
Lender
A/C book(borrower)
A/C book(lender)
1) Application
2) Collateral
Borrower 3) Matching report 3) Matching report
Intermediary(CSD) LenderBorrower
A/C book(borrower)
A/C book(lender)
Advantages of KSD SLB System
- Saves time and cost of searching for available securities
- Settlement guaranteed by the CSD SLB intermediary
- Facilitates market monitoring through centralized data management
Increased Efficiency by using the CSD System
Safety of SLB Transactions
Efficient Market Monitoring
- Enables effective decision from the price aspect- Quick processing of large volume transactions- Optimizes corporate actions administration
- Collateral securities held at CSD account- Daily marking to market of collateral securities
KSD’s Tri-Party Repo Services
Borrower Lender
SettlementTrading
Collateral managementRights management
Taxation
Trade management(Securities)
Trade management(Cash)
Participant A/C Book(Repo A/C)
Tri-partyRepo Agent
(CSD)
Tri-partyRepo Agent
(CSD)
Borrower Lender
Trade
Advantages of KSD Tri-Party Repo Service
Tri-partyRepo Agent
(CSD)
Tri-partyRepo Agent
(CSD)
· Transactions managed in a dedicated a repo account
· Risk reduced by DVP settlement and marking to market
Stability
· Offers repo services as a third party
Fairness
· Offers same level of CA management services as in the deposit system
· Convenient tax management
Convenience
· Allows customers to freely decide transaction conditions such as trade value, term and repo rate
Flexibility
KSD FundNet Service
CSD
The first case in the world a CSD established STP for the entire back-office operations of the asset management market
Asset managingcompany
Fund servicingcompany
Trustee
Other
Sellingcompany
Broker
Bank of Korea
Overseascustodian
Establishment & redemption system
Integrated trade confirmation system
Management instruction delivery system
DVP fund settlement system
Fund-by-fund deposit system
Efficiency and transparency ensured byimplementing STP for the asset management industry
Effects of KSD FundNet
Strengthened the role of CSD as
a local STP platform
CSDMinimized
settlement risk
Securities company
Reduced costs and opera-tional/settlement risk
Asset management company
Enhanced timely monitor-ing & compliance func-
tions
Trustee
Efficiency and transparency ensured byimplementing STP for the asset management industry
KSD Cross-border Clearing & Settlement System
CSD
Local investor Overseasbroker
Overseascustodian
3) Settlement instruction
4) Settlement instruction
5) Payment
Local broker1) Application 2) Application
NoticeLocal investor Overseas
broker
Overseascustodian
Local broker
CSD
One-stop service through the central deposit & settlement systemOne-stop service through the central deposit & settlement system
EfficiencyEfficiency
SafetySafety
ConvenienceConvenience
Cost-competitiveness
Advantages of KSD Cross-border Clearing & Settlement System
Customers can invest in overseas securities through the same processes
Process standardization and automation is easily achieved
CSD provides custody and management services for foreign currency
Fees for overseas custodians are low due to economy of scale
Cost-competitiveness
applied to domestic securities
securities
KSD Cross-border Clearing & Settlement Network
Overseas Network Overseas Network
Boston, USNY, USBrussels, BelgiumLuxemburg
4 overseas custodians
Network covers 36 overseas marketsNetwork covers
4 overseas custodians
Standardization/AutomationStandardization/Automation
Processes international operations during local business hours
Provides a standardized business envi-ronment Provides a standardized business envi-ronment
Processes international operations during local business hours
SWIFTSociety for World InterbankFinance Telecommunication
SAFE+KSD’s on-line network
SWIFTSociety for World InterbankFinance Telecommunication
Transfer Agent ServiceProtects shareholders’ rights and facilitates convenient rights exerciseProtects shareholders’ rights and facilitates convenient rights exercise
Reduces issuers’ costs and promotes market efficiencyReduces issuers’ costs and promotes market efficiency
Offers useful policy instrument to securities supervisory authorities Offers useful policy instrument to securities supervisory authorities
Stock Ex-change
CSD
Issuing company
Deposit/safe cus-tody
Public offering administration
TransferAgent
• Management of total number of shares issued and capital• Stock administration consulting• Management of beneficial shareholder records
Entrust stock administration
Aligned process within
CSD
Effects of Transfer Agency Service Offered by KSD
Management of shareholders' list
Deposit/safe-custody of securities
Management of beneficial shareholders, voting rights exercise
CA processing for overseas securities
Effective back- office service for the stock market
Transfer of title
Notification of share-holder rights
Deposit systemTransfer Agent
Effective back- office service for the stock market
Deposit systemTransfer Agent
Global Business DepartmentKorea Securities Depository
Phone : 82-2-3774-3357 Fax: 82-2-3774-3462E-mail: [email protected] Homepage : www.ksd.or.kr