KSD Enhances Convenience of Foreigners' Securities Lending Transaction Information Storage Following Domestic Investors

[Asia Economy Reporter Lee Seon-ae] Korea Securities Depository (KSD) announced that it has successfully completed the SWIFT (Society for Worldwide Interbank Financial Telecommunication) linkage for the ‘Loan Transaction Contract Confirmation System’ and will provide the service starting from the 27th. This is to enhance the convenience of storing loan transaction information for foreigners following domestic investors.

The Loan Transaction Contract Confirmation System was established to support participants' obligation to store loan transaction information for short selling purposes, following the amendment of the Capital Markets Act in April. Those who enter into loan transaction contracts for short selling purposes must retain the loan transaction information for five years.

Since the first phase of the system opened on March 8, approximately 32,000 contracts, 99 million shares, and KRW 4.1 trillion (as of December 23) worth of loan transaction contracts have been confirmed and stored through the KSD system.

This corresponds to about 19% of the domestic institutional short selling transaction amount (KRW 21.7 trillion) from the partial resumption of short selling in May this year (May 3 to December 23), and 22% compared to 441 million shares of short selling transaction volume. Currently, a total of 90 companies (120 accounts), including major domestic securities firms and asset management companies, are using the KSD Loan Transaction Contract Confirmation System.

For non-resident foreigners, the KSD ‘Loan Transaction Contract Confirmation System’ was previously accessible only through domestic standing agents, but with this system linkage, they can now use it directly from overseas.

A KSD official stated, “This is expected to improve the user environment for foreigners storing loan transaction information and increase usage rates,” adding, “KSD will continue to strive for securing transparency in the securities market and advancing the loan market through ongoing service improvements.”

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