KSD Provides March Securities Lending Contract Confirmation System "Enhancing Transparency and Supporting Short Selling System Improvement"

[Asia Economy Reporter Lee Seon-ae] The Korea Securities Depository announced on the 15th that it will provide the securities lending transaction contract confirmation system service starting March 8.

Participants in securities lending transactions, such as financial institutions, can confirm securities lending transaction contracts through the contract confirmation system, securely store the original contracts, and also have integrated access to the status of securities lending transactions.

Currently, borrowers and lenders confirm securities lending contracts via messenger, phone, email, etc. However, it has been pointed out that errors or mistakes during manual input processes are causing the occurrence of naked short selling.

To improve this, the National Assembly and the Financial Services Commission have newly established the ‘obligation to store and report securities lending transaction information for borrowed short selling’ in the Capital Markets Act, and detailed matters will be enforced through the enforcement decree starting April 6.

The Korea Securities Depository plans to support the smooth implementation of the enforcement decree of the Capital Markets Act, which requires those who borrow securities for the purpose of borrowed short selling to store and submit securities lending related information, through the establishment of this system.

Lee Myung-ho, President of the Korea Securities Depository, stated, “Through the establishment of the securities lending transaction contract confirmation system, we expect not only to improve customer convenience but also to resolve distrust in securities lending and short selling transactions by enhancing transaction transparency, and to support the Financial Supervisory authorities’ policy improvements on short selling systems.”

Meanwhile, the Korea Securities Depository plans to make further efforts for the advancement of the securities lending market and to support government and National Assembly policies for improving short selling systems through continuous business improvements in the future.

This content was produced with the assistance of AI translation services.