KSD Overview December 14, 2001 Tashkent, Uzbekistan H.S. Yoo.
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Transcript of KSD Overview December 14, 2001 Tashkent, Uzbekistan H.S. Yoo.
Overview of Korean Securities Market
Securities Market Infrastructure
Overview of Trade & Settlement in Korea
Market Statistics
4
Securities Market Structure
: Audit & Inspection
: Planning & Admission
: Decision-MakingMinistry of Finance & Economy
Financial Supervisory Commission
Financial Supervisory Service
K S E KOSDAQ K O F E XOTC
Equity,Bond
KOSPI 200
Equity
Bond Equity Futures
Options
KOSCOMK S D
Deposit
Settlement
Computer System
Overview
5
Overview of Trade & Settlement in Korea
Members
Trade volume(year 2000)
Clearing
Settlement
Delivery
Payment
Netting
Settlement Cycle
K S E I N A S OTC(Bond) KOFEXKOSDAQ
SecuritiesCompanies
InstitutionalInvestors
InstitutionalInvestors
FuturesCompanies
SecuritiesCompanies
USD 506.2 bln USD 58 bln USD 1,416 bln USD 179.6 blnUSD 449.5 bln
K S E K S D K S D K O F E XK S D
K S D K S D K S D K O F E XK S D
Book-entryTransfer
Book-entryTransfer
Book-entryTransfer -
Book-entryTransfer
DesignatedBank
DesignatedBank B O K Designated
BankDesignated
Bank
Multilateral Bilateral R T G S MultilateralMultilateral
T+2 T+2 T T+1T+2
Overview
6
Market Statistics
Market Value
KSE 237 trillion KRW(182 billion USD)
KOSDAQ 45 trillion KRW(35 billion USD)
Total Market Value 282 trillion KRW(217 billion USD)
Listed Shares
KSE 19 billion shares
KOSDAQ 7.2 billion shares
Total Listed Shares 26.2 billion shares
Overview
(as of June, 2001)
8
Foundation
KSD Profile
December 1974
Commercial Code
Wholly-owned Subsidiary
of KSE
December 1974
Commercial Code
Wholly-owned Subsidiary
of KSE
April 1994
Securities & Exchange
Act (SEA)
Over 100 shareholders
Non-Profit Seeking
Special Public Organization
Sole CSD under the SEA
April 1994
Securities & Exchange
Act (SEA)
Over 100 shareholders
Non-Profit Seeking
Special Public Organization
Sole CSD under the SEA
KSSC KSD
9
Participants964 accounts for 456 participants (Oct. 2001)
KSD Profile
15%
14%
10%
8%
46%
7%Broker/Dealer(71)
Bank(62)
ITC(47)
Insurance (35)
Other Financial Institution (210)
Others(32)
10
Financial highlights (Dec. 31, 2000)
Total assets of 753 billion KRW
(579 million USD)Shareholder’s equity of 241 billion KRW
(185 million USD)Net income of 69 billion KRW
(53 million USD)
KSD Profile
Scope of Business
Centralized Deposit and SettlementEligible SecuritiesAccount BookKSE SettlementKOSDAQ SettlementDebt Settlement (OTC)Institutional Settlement(INAS)
Corporate Actions Cross-border Securities Settlement Derivative Settlement Services
Deposit & Settlement
Eligible Securities Account Book KSE Settlement KOSDAQ Settlement Debt Settlement (OTC) Institutional Settlement(INAS)
Scope of business
13
Eligible Securities
Securities listed on the KSE;
Securities registered on the KOSDAQ;
Short-term monetary instruments including CD
s and CPs; and
Securities deemed appropriate by KSD
Deposit & SettlementScope of business
14
Account Book
Participant
Client
Client A/C Book
Participant A/C BookProprietary Client
Deposit
Redeposit
Deposit & SettlementScope of business
15
KOSCOM
KSE Market Settlement
KSE
Broker/DealerBroker/Dealer4. Settlement(T+2, 4 p.m.)
3. Settlement Statement(T+2 Morning)
2. Clearing Data(T+1)
1. Trade (T) / Confirmation (T) 1. Trade (T) / Confirmation (T)
3. Settlement Statement(T+2 Morning)
4. Settlement(T+2, 4 p.m.)
Deposit & SettlementScope of business
16
KOSCOM
KOSDAQ Settlement
KOSDAQ
Broker/DealerBroker/Dealer4. Settlement(T+2, 4 p.m.)
3. Settlement Statement(T+2 Morning)
2. Trade Data(T)
1. Trade (T) / Confirmation(T) 1. Trade (T) / Confirmation(T)
3. Settlement Statement(T+2 Morning)
4. Settlement(T+2, 4 p.m.)
Deposit & SettlementScope of business
17
1. IDB and participants enter the trade details into the SAFE 21.
2. KSD matches the trade details from each trade counterpart and sends matching report to them.
3-1 KSD checks if the seller’s account has enough securities to settle the trade. If yes, KSD restricts the securities from disposal.
3-2 KSD transmits the fund transfer instruction to BOK.(KSD a/c→Seller a/c)
4. The buyer transfers the settlement fund into KSD’s a/c
5. Simultaneously BOK-wire transfers the settlement fund into the seller’s a/c
6. BOK-wire transmits the message that the settlement fund is credited into seller’s a/c.
Simultaneously, KSD transfers the securities into the buyer’s a/c.
Buyer`s a/c
KSD’s a/c
[BOK]
④ Fund ransfer
Seller`s a/c
③Transmission
⑤ Fund Transfer
Participants
Matching System
<Seller’s a/c>enough securities ?
Queuesystem
[KSD]
no
Restriction of Bonds
yes
Bonds Transfer
Trade details
②Matching report
Fund Transfer Instruction
(KSD→Seller)
Transfer Results(Simultaneously)
[Interface]
⑥Transmission
Debt Settlement (OTC)
Deposit & SettlementScope of business
18
INAS System
Deposit & SettlementScope of business
Institutional Investor
Securities Company
Order OrderExecution
KSE
4. Settlement(Book-Entry:T+2)
2. Confirmation & Affirmation(T+1)
3. Preliminary
Settlement Data (T+1) 3. Preliminary
Settlement Data (T+1)
1. Trade Data (T)
19
Beneficial Owner’s BookBeneficial Owner’s Book
Corporate Actions : Beneficial Owner System Beneficial Owner : The persons whose stocks are deposited with
KSD and registered in KSD’s name
Streamlined procedure for rights exercising by beneficial owners
Efficient way of securities management for issuers & participants
Issuer(Transfer Agent)Issuer(Transfer Agent)
Client a/c BookClient a/c Book
ParticipantsParticipants
Participant a/c BookParticipant a/c Book
Beneficial OwnerBeneficial Owner
KSDKSD
Right Exercising(Direct)
Request for Right Exercising
Beneficial Owners’ Statement
Right Exercising(Indirect)
Notification
Request for rights exercising
Redeposit
Beneficial Owners’ Statement
Deposit
ClientClient ProprietaryProprietary
Scope of business
Cross-border Securities Settlement
Outbound Settlement System- Settlement system for Korean investors who invest in foreign securities market
Inbound Settlement System- Settlement system for foreign investors who
invest in Korean securities market
Scope of business
21
Outbound Settlement SystemGlobal Custody - General Investors : Mandatory - Institutional Investors : OptionalCross-border Clearing Network(CCN) - 42 Countries covered - Sub-Custodian : Euroclear, Clearstream, State Street Bank, BNY - Communication : SAFE21, SWIFT, Sub-Custodian’s proprietary S/W
CSD A(Or Global Custodian)CSD A(Or Global Custodian) KSD
<Overseas> <Korea>
Participant 1 Participant 2 KSD Participant 5Participant 4Participant 3
Cross-border Securities SettlementScope of business
22
Inbound Settlement System(Local Custody Services)
Agent Services (Investment Registration) Custody & Settlement of Securities Cash Management / Corporate Actions Services Linkage with Foreign CSDs : HKMA, JSCC Total Assets under Custody (Oct. 30, 2000) Equity : 3.5 trillion KRW (2.7 billion USD) Debt Securities :28.5 billion KRW (22.5 million USD)
CSD A(or Global Custodian)CSD A(or Global Custodian) KSD
<Overseas> <Korea>
CSD A(or LC)CSD A(or LC)Participant 1 Participant 2 Participant3 Participant 5Participant 4
Cross-border Securities SettlementScope of business
23
Securities Lending / Repo Securities Lending & Settlement Services
Lender : FeeBorrower
– Arbitrage trading– Settlement Coverage
Triparty Repo ServicesLending and Borrowing of funds by collateralizing sec
uritiesSettlement and collateral management on behalf of part
icipants
Scope of business