The Korea Securities Depository (KSD), jointly with related institutions, has prepared a set of guidelines for domestic financial institutions that wish to settle and withhold offshore government bonds via international central securities depositories (ICSDs).
The guidelines were produced as a response to an increase in offshore investment demand from foreign investors in anticipation of the inclusion of Korean government bonds in the World Government Bond Index (WGBI). The aim is to facilitate the offshore buying, selling, and settlement of Korean government bonds by domestic financial institutions with foreign investors through ICSDs.
Some institutions involved in creating the guidelines include Korea’s Financial Services Commission, Financial Supervisory Service, and Bank of Korea. The ICSDs include Euroclear and Clearstream. The increase in offshore supply channels for Korean government bonds is expected to improve the access for global investors and the assets’ international credibility.
The guidelines will take effect in mid-February.
