Clearstream, the International Central Securities Depository part of Deutsche Börse Group, has opened an account with the Korean Securities Depository
(KSD) to provide settlement and custody services for foreign investors intending to hold Korean government debt instruments including Korean Treasury bonds (KTB) and Monetary Stabilization Bonds (MSB).
Having an omnibus account directly with KSD will facilitate the post trade processes for non-Korean investors investing in Korean government debt instruments like KTBs and MSBs. It will provide liquidity and efficiency to the government bond market as well as facilitate cross-border investments.
Clearstream is the only ICSD to already offer market access to its customers in the Korean market, through a link that was opened in 2002.
Foreign investors currently own approximately Korean won (KRW) 38 trillion (€21 billion) in KTBs and MSBs, which represents seven percent of the entire outstanding Korean government debt market. According to the Asian Development Bank, the total value of outstanding Korean government debt stood at around KRW 490 trillion (€272 billion) as at the end of 2008.
"The linkage between Clearstream and KSD will play a pivotal role in facilitating foreign investment in the Korean Bond Market. At the same time I hope and believe our bilateral cooperation will remarkably boost foreign investment in the Korean Bond Market, serving its globalization", said Soo-Hwa Lee, Chairman & CEO of KSD.
"This is an important step forward for the Korean bond market as well as for Clearstream, who has always recognized Korea as being one of its most important markets in Asia", said Jeffrey Tessler, CEO of Clearstream. "This is yet another illustration of Clearstream's commitment to servicing participants in inbound and outbound investments in the Korean market and, generally, in the Asia-Pacific region."
Clearstream has been present in Asia-Pacific since 1991, with an office in Hong Kong. In 2007, Clearstream strengthened its presence in this region by opening offices in Singapore and Tokyo.