Transcript KSD Overview

KSD Overview
December 14, 2001
Tashkent, Uzbekistan
H.S. Yoo
Outline
 Overview of Korean Securities Market
 KSD Profile
 Scope of Business
Overview of Korean Securities
Market
Securities Market Infrastructure
Overview of Trade & Settlement in Korea
Market Statistics
Overview
Securities Market Structure
Ministry of Finance & Economy
: Decision-Making
Financial Supervisory Commission : Planning & Admission
Financial Supervisory Service
K S E
KOSDAQ
Equity,Bond
KOSPI 200
K S D
Deposit
Settlement
Equity
: Audit & Inspection
OTC
KOFEX
Equity
Bond
Futures
Options
KOSCOM
Computer System
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Overview
Overview of Trade & Settlement in Korea
K S E
KOSDAQ
I NAS
OTC(Bond)
KOFEX
Members
Securities
Companies
Securities
Companies
Institutional
Investors
Institutional
Investors
Futures
Companies
Trade volume
(year 2000)
USD 506.2 bln
USD 449.5 bln
USD 58 bln
USD 1,416 bln
USD 179.6 bln
Clearing
K S E
K S D
K S D
K S D
KOFEX
Settlement
K S D
K S D
K S D
K S D
KOFEX
Delivery
Book-entry
Transfer
Book-entry
Transfer
Book-entry
Transfer
Book-entry
Transfer
-
Payment
Designated
Bank
Designated
Bank
Designated
Bank
B O K
Designated
Bank
Netting
Multilateral
Multilateral
Bilateral
RTGS
Multilateral
Settlement Cycle
T+2
T+2
T+2
T
T+1
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Overview
Market Statistics
(as of June, 2001)
Market
Value
KSE
237 trillion KRW(182 billion USD)
KOSDAQ
45 trillion KRW(35 billion USD)
Total Market Value
Listed
Shares
282 trillion KRW(217 billion USD)
KSE
19 billion shares
KOSDAQ
7.2 billion shares
Total Listed Shares
26.2 billion shares
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KSD Profile
 Foundation
 Participants
 Financial Highlights
KSD Profile
Foundation
KSSC
KSD
April 1994
December 1974
Commercial Code
Wholly-owned Subsidiary
of KSE
Securities & Exchange
Act (SEA)
Over 100 shareholders
Non-Profit Seeking
Special Public Organiza
Sole CSD under the SEA
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KSD Profile
Participants
 964 accounts for 456 participants (Oct. 2001)
7%
15%
Broker/Dealer(71)
Bank(62)
14%
ITC(47)
Insurance (35)
46%
10%
8%
Other Financial Institution (210)
Others(32)
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KSD Profile
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)
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Scope of Business
 Centralized Deposit and Settlement
Eligible Securities
Account Book
KSE Settlement
KOSDAQ Settlement
Debt Settlement (OTC)
Institutional Settlement(INAS)
 Corporate Actions
 Cross-border Securities Settlement
 Derivative Settlement Services
Scope of business
Deposit & Settlement
 Eligible Securities
 Account Book
 KSE Settlement
 KOSDAQ Settlement
 Debt Settlement (OTC)
 Institutional Settlement(INAS)
Scope of business
Deposit & Settlement
Eligible Securities
 Securities listed on the KSE;
 Securities registered on the KOSDAQ;
 Short-term monetary instruments including
CDs and CPs; and
 Securities deemed appropriate by KSD
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Scope of business
Deposit & Settlement
Account Book
Participant A/C Book
Proprietary
Client
Redeposit
Participant
Client A/C Book
Deposit
Client
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Scope of business
Deposit & Settlement
KSE Market Settlement
1. Trade (T) / Confirmation (T)
1. Trade (T) / Confirmation (T)
KSE
KOSCOM
2. Clearing Data
(T+1)
3. Settlement Statement
(T+2 Morning)
Broker/Dealer
4. Settlement
(T+2, 4 p.m.)
3. Settlement Statement
(T+2 Morning)
Broker/Dealer
4. Settlement
(T+2, 4 p.m.)
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Scope of business
Deposit & Settlement
KOSDAQ Settlement
1. Trade (T) / Confirmation(T)
1. Trade (T) / Confirmation(T)
KOSDAQ
KOSCOM
2. Trade Data
(T)
3. Settlement Statement
(T+2 Morning)
Broker/Dealer
4. Settlement
(T+2, 4 p.m.)
3. Settlement Statement
(T+2 Morning)
Broker/Dealer
4. Settlement
(T+2, 4 p.m.)
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Scope of business
Deposit & Settlement
Debt Settlement (OTC)
Participants
Trade
details
②Matching
report
Matching System
Buyer`s a/c
Queue
system
no
④ Fund
ransfer
<Seller’s a/c>
enough securities ?
yes
Restriction of Bonds
Bonds Transfer
③Transmission
Fund Transfer
Instruction
(KSD→Seller)
Transfer Results
(Simultaneously)
KSD’s
a/c
⑤ Fund
Transfer
Seller`s a/c
⑥Transmission
[KSD]
[Interface]
[BOK]
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.
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Scope of business
Deposit & Settlement
INAS System
2. Confirmation &
Affirmation(T+1)
1. Trade Data (T)
3. Preliminary
3. Preliminary
Settlement Data (T+1)
Settlement Data (T+1)
4. Settlement(Book-Entry:T+2)
Institutional
Investor
Securities
Company
Order
Order
Execution
KSE
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Scope of business
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
Right Exercising(Direct)
Beneficial Owner
Issuer(Transfer Agent)
Notification
Deposit
Request for
Right
Exercising
Beneficial Owner’s Book
Right Exercising(Indirect)
Request for rights exercising
Participants
Beneficial Owners’ Statement
Redeposit
Beneficial Owners’
Statement
KSD
Client a/c Book
Participant a/c Book
Client Proprietary
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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
Cross-border Securities Settlement
Outbound Settlement System
Global Custody
- General Investors : Mandatory
- Institutional Investors : Optional
Cross-border Clearing Network(CCN)
- 42 Countries covered
- Sub-Custodian : Euroclear, Clearstream, State Street Bank, BNY
- Communication : SAFE21, SWIFT, Sub-Custodian’s proprietary S/W
<Overseas>
<Korea>
KSD
CSD A(Or Global Custodian)
Participant 1
Participant 2
KSD
Participant 3
Participant 4
Participant 5
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Scope of business
Cross-border Securities Settlement
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)
<Overseas>
<Korea>
KSD
CSD A(or Global Custodian)
Participant 1
Participant 2
Participant3
CSD A(or LC)
Participant 4
Participant 5
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Scope of business
Securities Lending / Repo
 Securities Lending & Settlement Services
Lender : Fee
Borrower
– Arbitrage trading
– Settlement Coverage
 Triparty Repo Services
Lending and Borrowing of funds by collateralizing
securities
Settlement and collateral management on behalf of
participants
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