Clearstream and KSD Sign Agency Agreement to Facilitate Access to Korean Market for Foreign Investors

Following the signing of a MoU​ with the Korean Securities Depository (KSD) in December last year, Clearstream, a leading European provider of post-trade services which is wholly owned by Deutsche Börse, signed an agency agreement with the Korean financial institution in Luxembourg on Wednesday (August 30).

The agreement is in line with global standards and allows for the implementation of an ICSD (International Central Securities Depository) omnibus account structure to facilitate access to Korea Treasury Bonds (KTBs) and Monetary Stabilization Bonds (MTBs) for foreign investors. With the omnibus account, foreign investors can access to Korean market without applying for an Investor Registration Certificate (IRC) or open segregated accounts with a local custodian in Korea.

Soonho Lee, Chairman and CEO of KSD, said: "(The) signing is critically important as KSD and Clearstream have closely worked together and agreed to finalise legal and regulatory consultations. In the coming months, both organisations will spare no efforts to establish an optimal cross-border link that can be trusted by market participants."

Philip Brown, CEO of Clearstream Banking S.A., said: "Having been the only ICSD to provide access to the Korean market via the existing IRC investment route for more than a decade, Clearstream is actively committed to establish a strong and reliable link between our ICSD and KSD, further encouraging foreign investment in the Korean market."

In April, Clearstream secured the Qualified Foreign Intermediary (QFI) status​ from the National Tax Service of South Korea (NTS), making it the first ICSD to provide access to the Korean market via the traditional IRC investment route. This QFI status marks a significant step towards re-establishing the omnibus account structure and a cross-border link with the KSD.

Clearstream revealed that the cross-border link between its ICSD and KSD is expected to launch in the first half of 2024.