Working on electronic voting system and technologies from 4th Industrial Revolution to further strengthen shareholders rights and boost their interests
President Lee Byung-rae of Korea Securities Depository.
The Korea Securities Depository (KSD) has been working to build a system to incorporate technologies from the 4th Industrial Revolution to lead the electronic securities age and their adaptation in the securities industry.
President Lee Byung-rae said the company will be a leader in the new electronic securities age starting next year, which means the digitalization of the securities industry to save issuance costs, storage while slashing the time for securities transactions and rights executions.
The KSD will unveil its electronic securities depository system in September, next year, to open “the age of electronic securities,” which is hoped will reform the securities industry and further the development of the capital markets with the mix of new technologies that come with the arrival of the 4th Industrial Revolution.
The KSD will restructure its organization to be ready for the electronic securities system. The depository has been working on the revision of the regulations, including those on various fees for securities transactions, which are scheduled to be unveiled in August.
The KSD will be able to further help shareholders with a shadow voting system to be removed this year to let shareholders hold meetings freely. An electronic voting system and the introduction of the electronic letter of power of attorney will ensure that the power of shareholders and their interests are increased.
The KSD has been focused on the electronic voting services for the shareholders by mixing the associated with the new industrial revolution. The KSD is the central securities depository of Korea, providing a wide range of post-trade services for the Korean securities market.
The KSD was established in 1974 as a special corporation of a public nature. The participants of KSD number a total of 1,114, comprising financial institutions including securities companies, banks, insurance companies and foreign investors.
The KSD holds in deposit securities valued at 3,547 trillion won ($3 trillion) as of end of 2016. The KSD handles the settlement of securities traded on the Korea Exchange as well as the OTC settlement of equity and bonds, currently processing 22.3 trillion won daily in settlement funds.
Since the KSD has direct impact on the market, there are several mechanisms to ensure the fairness and transparency of its activities, and the KSD is supervised by regulatory bodies such as the Ministry of Strategy and Finance, Financial Supervisory Commission and Financial Supervisory Service.
Securities deposit refers to the act of entrusting securities for safekeeping and exercise of rights. When investors deposit securities with participants (securities companies or other financial institutions), the KSD provides services including custody, settlement of transactions, and exercise of rights for the deposited securities
The integration of worldwide securities markets has enabled securities transactions across national boundaries without being limited by temporal and geographical restrictions such as trading hours, domicile of investors, and country of issuance of the securities. The KSD supports cross-border issuance and circulation of securities of domestic companies, and investors' investment in the global financial market.
The KSD provides foreign securities deposit and settlement service in order to support the custody, settlement, and exercise of rights arising from foreign securities trading of domestic investors through global custodian and international central securities depositories.
A copy of the electronics letter of power of attorny shown on a computer screen, which will be introduced in September next year as KSD completes its electronic securities depository system to open the age of electronic securities in korea.(Photos: KSD)