Euroclear designates our site as the entity responsible for cash settlements and foreign exchange transactions in South Korea.
In a significant move that underscores its market expertise in Asia, a leading financial services platform has been appointed by Euroclear Bank SA/NV as the Cash Settlement and Foreign Exchange Bank for the Korea Securities Depository (KSD). This appointment positions the platform as a critical infrastructure participant supporting the settlement and currency exchange operations tied to Korean securities transactions through Euroclear.
The role is particularly relevant in the context of South Korea's potential inclusion in the World Government Bond Index (WGBI), a major global benchmark for sovereign bonds. Inclusion in the WGBI generally leads to increased foreign investment in a country's government bonds, as global investors and funds tracking the index must buy the eligible bonds.
Key implications of this appointment include facilitating foreign investment flows, supporting market infrastructure readiness, enhancing South Korea's global integration, and strengthening the KSD's connectivity. By acting as the cash settlement and foreign exchange bank, the platform helps ensure timely and efficient conversion and settlement of funds related to Korean bonds purchased by international investors who participate via Euroclear. This efficiency reduces settlement risk and operational friction, making Korean bonds more attractive.
The appointment builds on the platform's existing relationship with Euroclear across multiple markets and products. With a Securities Services business presence in over 30 markets globally, the platform is well-equipped to handle the increase in transaction volumes and complexity expected if Korea joins the WGBI.
Hyun-Nam Park, South Korea Branch Manager, expressed delight at extending the partnership with Euroclear in South Korea. Euroclear Bank has been working closely with the Korean capital market to provide a solution for international investors to access efficient and safe settlement of local Korean government bonds, a collaboration that is significant in achieving their shared goal.
Euroclear Bank, as a Financial Market Infrastructure, includes supporting and driving efficiencies to grow the global marketplace in its role. The bank sees the platform as a key partner in providing a solution for international investors to access efficient and safe settlement of local Korean government bonds.
The mandate between the platform and Euroclear Bank is focused on supporting South Korean government bond activity for Korea Treasury Bonds and Monetary Stabilization Bonds. South Korea is one of the bank's key markets in Asia and is seen as having high potential for growth.
Paul Maley, Global Head of Securities Services and Regional Head of Corporate Bank for the Americas, expressed gratitude for Euroclear's trust in the platform. Peter Sneyers, CEO of Euroclear Bank, has stated that their role is to support and drive efficiencies to grow the global marketplace.
Last year, the platform increased its capital allocation for its Seoul branch by €150 million, reflecting its commitment to the Korean market. This collaboration with Euroclear Bank is another important step towards providing a solution for international investors to access efficient and safe settlement of local Korean government bonds, supporting Korea’s ambitions to raise its profile and accessibility in the international bond investing community.
- The financial services platform's role as the Cash Settlement and Foreign Exchange Bank for the Korea Securities Depository (KSD) is crucial, particularly as South Korea's potential inclusion in the World Government Bond Index (WGBI) could lead to increased foreign investment in Korean government bonds.
- By facilitating timely and efficient conversion and settlement of funds related to Korean bonds purchased by international investors, the platform helps strengthen South Korea's global integration and makes Korean bonds more attractive to the international investing community.
