Market Link Guide – South Korea – KGBs and MSBs
Key features
CSD link as defined under CSDRa | Yes |
Type of link | Direct link with the Korea Securities Depository (KSD) |
a. CSD Regulation (EU) No 909/2014, Article 2(29).
CSD | |
| Name | Korea Securities Depository (KSD) |
FATCA GIIN | 7HKXGK.99999.SL.410 |
| LEI | 9884008RRMX1X5HV6625 |
Country of incorporation | South Korea |
Account type | Omnibus account |
Legal Account name/holder | Clearstream Banking S.A. |
Operational arrangements
Yes/No | Remarks | |
Settlement free of payment | Yes | Settlement free of payment in the domestic market is limited to NCBO portfolio transfers only. |
Settlement against payment | Yes | Eligible settlement currency: KRW (Korean Won). |
Settlement against payment in central bank money account of CBL/CBL clients | No | CBL holds a cash account at the cash correspondent and settlement bank. Against payment settlement in KRW takes place on the cash account of the cash correspondent and settlement bank at the Bank of Korea. |
Bridge settlement | No | |
Shaping facility | No | |
Partial settlement | No | |
Settlement penalty fees | No | |
Pre-matching | No | |
Back-to-back processing | No | |
Allegements | Yes | |
Automatic compensation | No | |
Registered securities | No | |
Multi-Market Securities | No | |
Lending and borrowing | No | |
Proxy voting | No | |
Investment Funds | No | |
Liquidity Hub Connect | No | |
Sale and purchase of rights | No | |
Repo services | Yes | CBL internal settlement. |
Market restrictions | Yes | Refer to Investment Regulation. |
FTT | No | |
Daily reconciliation | Yes |
Moment of entry of instructions | When the KSD is notified of the trade confirmation after the completion of the bond transaction. |
Irrevocability of instructions | Settlement instructions can be cancelled before they match. Once matched, the settlement instructions cannot be cancelled. |
Finality of instructions | Securities settlements are final when transferred in the KSD’s system. |
Local legislation
The below section is valid on the date of the legal opinions that were issued and might be subject to change. The information is provided for guidance only and should not be considered in isolation or as constituting a complete or definitive legal advice on any specific matter. The scope of the legal opinions is limited to the local legislation applicable to the relevant CSD (and intermediary, if any). For links using an intermediary located in another jurisdiction, please find a separate Local legislation section for the jurisdiction of the intermediary below. For clients accessing local markets via other Clearstream entities, please also review the Local legislation section in the relevant Market Link Guide for such Clearstream entity.
Local legislation of the CSD | |
Date of legal opinion | 30 April 2024 |
Nature of rights on securities | Substantive law of the jurisdiction will govern the nature of the rights on the securities. Rights on the securities are nominee rights/legal ownership. No differences in conclusions in case of sub-accounts for Clients within the Direct CSD Account. |
Recognition of nominee concept | Nominee concept recognised under local law. |
No right of retention to the CSD under local law | CSD does not have a lien or similar encumbrances on the securities under local law. |
No upper-tier attachments | Securities would not be subject to attachment. |
No right of use without prior consent | Laws of the jurisdiction restrict CSD from using securities without Clearstream’s prior consent. |
Segregation of assets at the CSD | CSD is under legal/regulatory obligation to segregate the securities held for each participant. |
Loss of assets | No general restrictions on ability to recover lost assets or on indemnification under local law, subject to certain exceptions noted by counsel (such as force majeure, no negligence by the CSD, liability caps, sovereign immunity, etc.). |
Ability to recover client assets in the event of insolvency of CSD | Securities would be recoverable. |
Ability to recover client assets in the event of insolvency of Agent | n/a. |
Shortfall pro-rated among holders | Shortfall in the securities may be allocated pro rata, but counsel noted certain nuances. |
Settlement finality in case of insolvency | Transfer orders are irrevocable and finality of settlement is assured. |