Euroclear Bank has announced plans to launch a link with Korea Securities Depository (KSD) to offer settlement, custody and related services for Korean Treasury Bonds (KTBs) and Monetary Stabilization Bonds (MSBs).
For implementation towards the end of the year, the link with KSD would be the 10th Asia-Pacific central securities depository (CSD) with which Euroclear Bank has a link.
Mr. Kwan-Rae Min, Director of Global Securities Services Team at Korea Securities Depository, said: The Korean government is planning to issue KTBs totaling more than KRW 81 trillion (EUR 45 billion) by the end of the year. If the National Assembly approves the revised law to exempt foreign investors in KTBs and MSBs from tax on interest and capital gains, the Euroclear Bank link with KSD will help foreign investors invest in these securities. Hence, it will promote liquidity, as well as efficiency, in the Government bond market.
Philippe Dirckx, General Manager and Regional Head of Euroclear Banks Asia-Pacific representative offices, said: With our well-established Asia-Pacific operations centre based in Hong Kong, we are uniquely placed to help local and foreign clients with their post-trade needs. Korean and other local Asia-Pacific language skills and our ability to quickly and efficiently gather and report business-critical information on Asian securities is fostering new benchmarks in cross-border, post-trade service quality for Asia-Pacific securities transactions.
Korea had the equivalent of KRW 490 trillion (EUR 272 billion) of government bonds outstanding at the end of 2008, according to data compiled by the Asian Development Bank. Foreign investors currently own KRW 38 trillion (EUR 21 billion) of KTBs and MSBs or about seven percent of the outstanding.