Transcript PowerPoint 프레젠테이션

Hyo-Sang Yoo
October 2, 2008
Korea Securities Depository
KSD Overview
Central Securities Depository of
Korea
Founded in 1974 under the
Commercial Code and transformed
in 1994 under the Securities &
Exchange Act
69 shareholders including KRX,
securities companies, banks, etc
and 1,000 participants including
securities companies, banks,
insurance companies, etc. (Dec. 31,
2007)
Supervised by Ministry of Strategy
& Finance, Financial Services
Commission (FSC), and Financial
Supervisory Service (FSS)
※ Participants of KSD
700
57%
600
500
69%
61%
55%
45%
52%
48%
43%
400
39%
300
31%
200
100
0
2003
2004
2005
2006
2007
No. & ratio of Domestic Participants
No. & ratio of Foreign Participants
Korea Securities Depository
1
Models for Cross-border Settlement
Cross-border Securities Settlements
Global
Custodian
Local Agent
ICSD
6 Models
Direct
Access
CSD Linkage
Multi CSD
Model
These models vary by “legislation structure”, “market practices for investment”
and “openness for foreign financial organization”
Korea Securities Depository
2
Global custody for Korean investors
Cross-border custody, settlement and corporate action services over the 34
markets of 32 countries with 6 custodians for overseas investment by domestic
investors
Europe
ICSDs
Austria
Euroclear
Denmark Clearstream
Finland
France
Germany
Greece
Mid East
Ireland
United Arab
Italy
Emirates
Netherlands
Norway
Portugal
Spain
Switzerland
United Kingdom
Asia
Australia
China(Shanghai)
China(Shenzen)
Hong Kong
Indonesia
Japan
New Zealand
Philippines
Singapore
Thailand
Americas
Argentina
Canada
Chile
Mexico
United States
* Custody Network Euroclear, Clearstream, Citibank, BNY Mellon, SSB, Pershing
Korea Securities Depository
3
Global custody for Korean investors
※ Cross-border settlement volume
※ Increasing settlements on 3 Asian
markets
(Bil., USD)
Category
China
Hong
Kong
Japan
Total
Korea Securities Depository
2005
2006
2007
No. of
Settlement
1,312
4,044
13,468
Increasing
rate
-
208%
233%
No. of
Settlement
1,417
8,676
57,660
Increasing
rate
-
512%
565%
No. of
Settlement
1,532
2,001
5,513
Increasing
rate
-
31%
176%
No. of
Settlement
4,261
14,721
76,641
Increasing
rate
-
245%
421%
4
Local custody - Disintermediation
KSD’s custody service (1998)
- custodian services: securities and cash account opening and management, settlement and
balance report, etc.
- standing proxy services: exercise of voting right and dividend distribution, reports to the
regulator, investment registration to FSS, etc.
Unique model that CSD
functions as a local custodian by
DISINTERMEDIATION to crossborder investment
Foreign Investor
Global Custodian
DISINTERMEDIATION
by KSD’s
local custody service
- Direct access to CSD
- Custody a/c as
a participant’s a/c
and legal ledger
Korea Securities Depository
Multi-tier
structure
for foreign
investors
Local Custodian
KSD
5
Local custody - Disintermediation
Prerequisite conditions for custody
service by CSD
- stipulation by laws or decrees for
cross-border securities deposit and
settlement business by account opening
with foreign CSDs or foreign institutional
organizations
Advantages of KSD’s custody service
- direct access to CSD, custody a/c as a
participant’s a/c and legal ledger
- precise corporate actions by CSD
- stable and firm legal basis as CSD
- reasonable fee
Weakness of KSD’s custody service
Overcoming the weakness:
- non-commercial banking institution (cash
management or FX not available
directly)
- alliance with commercial bank for cash
management and FX
- no global network
Korea Securities Depository
6
CSD Linkage
Base of CSD linkage – Local custody service
Co-listing of Korean securities on Tokyo Stock Exchange
- Kodex200 co-listed on KRX and TSE in November, 2007
- arbitrage trading between Korea and Japan
- STP through SWIFT for migration (1 BUSINESS DAY)
CSD linkage between KSD-HKMA for bond settlement
- no transaction since linkage setup (1999)
- CSD linkage SHOULD BE BASED on the MARKET DEMAND
Korea Securities Depository
7
CSD Linkage
KSD-JASDEC linkage
 Selling
’ Buying
TSE
Selling Broker
Japan
Buying Broker
 Data of trading
 Application for listing
JASDEC
Selling broker
Buying broker
Issuer
Korea
 Notification of
deposit (Migration)
 Stocks issuing & deposit
(through brokers)
Korea Securities Depository
KSD
Custody
agreement
JASDEC A/C
8
Transfer Agent Linkage - Share Migration
Share migration service by transfer agent linkage for co-listed company
- STX Pan Ocean, a Korean entity listed on SGX (July 2005) and KRX (Sep. 2007)
- Share migration demand from Singaporean shareholder and setup of transfer agent
linkage
※ Transfer agent linkage model
M
Application for
Migration
M+1
Migration
form
notice
M+2
Form
acceptance
Share
holder
Singapore
T.A.
KSD
Singapore
T.A.
M+2~5
Ready to
issue
M+6
Share issue
KSD
KSD
Singapore
T.A.
Share
holder
Inefficiency for migration and risks of arbitrage trading comparing to CSD
linkage
- 6 BUSINESS DAYS to migrate for arbitrage trading
Korea Securities Depository
9
Issuance of KDR and shares for foreign
companies' listing in Korea
Current foreign candidates for KRX listing
- Mostly Chinese and Japanese companies
- Cayman holding companies which have subsidiaries in mainland China
- U.S, Germany, Canadian companies also considering listing to Korean market
※ Foreign Companies’ Listing to Korean Market
Companies
Establish
ment
Issuing
country
Foreign listing
Migration
Listing type
Listing
schedule
3NOD Digital
Cayman
Korea
Non-listing
X
Share
Aug. 2007
Huafeng Group
Holdings
Cayman
Hong Kong
Hong Kong
O
KDR
Nov. 2007
Cowell E Holdings
Cayman
Korea
Non-listing
X
Share
Feb. 2008
6 more companies
Japan
Hong Kong
Cayman
Korea
Japan
Non-listing
O
X
Share or KDR
November
December
Korea Securities Depository
10
FundNET Development (Background)
Obstacles to Advancement of the Securities Market
Loss of Investor Confidence Due to
Decreased Transparency
High-Cost, Low-Efficiency Operation Processes
Inadequate Asset Management
Industry Infrastructure
Asset Management Industry
Information Infrastructure
Securities
Companies
Securities
Companies
Trustees
IMs
Trustees
Securities
Companies
Advancement of the Securities Market Through
Development of the Asset Management Industry
Regained Investor Confidence
With Transparent Fund Management
Low-Cost, High-Efficiency Back-office
Infrastructure
IMs
Trustees
Information
Infrastructure
Fund
Admin
Fund
Admin
Korea Securities Depository
Fund Admin
IMs
11
FundNET – Operating Structure
Investment
Managers
Fund
Administrator
1
2
4
3
3
1
Distributors
4
5
2
Fund
FundNet
E/R System
6
5
6
Fund Asset
D/S System
5
7
7
Broker/
Dealers
8
Custodians/
Trustees
Korea Securities Depository
12
Thank You!
Korea Securities Depository
13