Euroclear Bank and Korea Securities Depository (KSD) announce today a bilateral agreement whereby KSD will establish a link to Euroclear Bank’s FundSettle platform, the automated, multi-currency fund-transaction processing solution. KSD will adopt FundSettle as part of its fund-processing infrastructure.
Euroclear Bank and KSD will also work together to develop KSD’s multicurrency, cross-border investment fund distribution system, exchanging relevant information and organising cross-entity training programmes.
Mr. Soo-Hwa Lee, Chairman and Chief Executive Officer of Korea Securities Depository, said: “KSD is a transfer agent for all Koreandomiciled investment funds, connecting to local fund distributors and trustees. The link with FundSettle will enable Korean investors to use KSD as the centralised access point to invest in international funds. Transactions will be processed on a straight-through basis, involving no manual processing, which means at low risk. Processing and asset servicing costs will also be low due to the economies of scale that KSD, as the central agent, will be able to offer our clients. As a result of this initiative, we expect a substantial increase in STP rates from close to zero to more than 90% for cross-border investment fund processing.”
Frédéric Hannequart, Chairman of Euroclear Bank, said: “Our growing relationship with Korea Securities Depository is reinforcing our commitment to the Korean market and to the Asia-Pacific region in general. In less than one year, Euroclear Bank became the first international central securities depository to process Korean government bond transactions and use Korean Treasury Bonds and Monetary Stabilisation Bonds as collateral for clients in securities finance transactions administered as a triparty agent. Now, we are the first to offer a joint solution with KSD to increase operational efficiencies in fund-transaction processing. We value the trust that KSD and the Korean market have placed with Euroclear Bank.”
Euroclear Bank launched a link with Korea Securities Depository in October 2009 to offer settlement, custody and related services for Korean Treasury Bonds and Monetary Stabilisation Bonds. Euroclear and KSD also signed a Memorandum of Understanding in 2009 to explore how best to co-operate in supporting international clients active in the Korean capital markets and Korean entities interested in the wide range of markets covered by Euroclear Bank.
Euroclear Bank is the first and only international central securities depository to have been operating continuously out of the Asia-Pacific region since 1987.