Clearstream Obtains First Qualified Foreign Intermediary Status in Korea

Clearstream, a leading European provider of post-trade services which is wholly owned by Deutsche Börse, announced that it has secured the Qualified Foreign Intermediary (QFI) status from the National Tax Service of South Korea (NTS), becoming the first international central securities depository (ICSD) to provide access to the Korean market via the traditional Investor Registration Certificate (IRC) investment route.

The QFI status further allows Clearstream to offer its omnibus account services, with tax exemption on interest income and capital gains on Korea Treasury Bonds (KTBs) and Monetary Stabilisation Bonds (MSBs) in the Korean market. Previously, the two organizations had signed a MoU​ in Luxembourg to cooperate on reestablishing a cross-border link that would allow international investors efficient post trade access to Korea KTB and MSB.

With the qualification, once the new omnibus account structure is in place, foreign investors will no longer be required to apply for an IRC or open segregated accounts with a local custodian in Korea but can instead settle and safekeep KTBs and MSBs directly via their existing Clearstream accounts, which will bring more convenience and flexibility to KTB and MSB investments and allow foreign investors to benefit from the tax exemption on interest income and capital gains on these securities.

The depository commented on the announcement: "The granting of the QFI status is a significant step towards re-establishing the omnibus account structure and a cross-border link with the Korea Securities Depository (KSD) that will offer international investors efficient post-trade access to KTBs and MSBs in Korea."