KSD "Securities Token Platform Roadmap to be Established by November This Year"

President Lee Myung-ho Emphasizes at Online New Year Press Briefing
"Non-Marketable Asset Platform to Enhance Transparency in Private Equity Market"

[Asia Economy Reporter Minji Lee] Lee Myung-ho, President of the Korea Securities Depository (KSD), reiterated on the 23rd his strong commitment to actively work towards the inclusion of innovative financial services based on blockchain technology within the regulatory framework this year.

At the CEO-hosted New Year press briefing held online that day, President Lee stated, “To establish the foundation for the inclusion of blockchain-based Securities Tokens (ST) within the regulatory framework, we will prepare a mid-to-long-term roadmap for platform construction by November.”

Securities Tokens refer to crypto assets that embed securities rights such as stocks and bonds into blockchain-based tokens. Recently, countries around the world have shown active acceptance of securities tokens. For example, Germany enacted a law equivalent to the Electronic Securities Act in June last year, incorporating virtual asset-related provisions into legislation.

So far, KSD has been proactively responding to the institutional acceptance of virtual assets by focusing on the development potential of securities tokens since last year. The concept test for blockchain-based registration management of securities tokens in a test platform environment was completed in November last year, and the research project commissioned in the second half of last year to support virtual asset legislation is scheduled to be completed by June. At the press briefing, Choi Jung-jeol, Head of Strategic Planning, said, “Discussions on virtual asset legislation will continue even after the new government takes office,” adding, “As Korea’s electronic registration institution, we plan to actively propose institutional alternatives suited to Korea’s circumstances.”

Furthermore, KSD plans to expand the ‘Non-Marketable Asset Investment Support Platform’ to restore trust in the private equity fund market, which was tarnished by the Optimus and Lime incidents. Last year, KSD analyzed 244 non-marketable assets (private bonds, loan receivables) and tangible assets, assigned standard codes to ensure transparent management of assets, and provided services to support asset reconciliation among asset management companies, trust companies, and administrative agents. President Lee described this as “the most memorable project during my two-year tenure,” expressing confidence that “the platform construction has significantly enhanced transparency in the private equity fund market.” He added, “This year, we will focus on improving convenience and cost-effectiveness of the service to expand participant numbers.” Currently, there are a total of 272 participating institutions (245 asset management companies, 17 trust companies, 10 administrative management companies) with 7,333 assets registered.

KSD also plans to accelerate the establishment of a system for fractional trading of domestic stocks. Last year, KSD built a fractional trading system for overseas stocks, which was praised for enhancing investment convenience for small investors. For domestic stocks, KSD intends to utilize the trust system to issue multiple beneficiary certificates by dividing whole shares, allowing investors to invest in these divided beneficiary certificates. The domestic stock fractional trading service is scheduled to be launched in September this year. Additionally, KSD plans to pursue this year △ activation of risk-free benchmark interest rate calculation and disclosure △ establishment of a support system for the introduction of government bonds for individual investors △ ESG management system construction △ expansion of target areas for innovative startup support programs.

Meanwhile, KSD announced that major business sectors showed rapid growth last year, driven by the increased participation of individual investors in the securities market. The securities settlement amount in the electronic registration and settlement sectors reached KRW 7,492 trillion, up 13.8% from the previous year. The total assets under management increased by 10.3% to KRW 6,450 trillion during the same period. With a significant rise in overseas stock participation, foreign currency securities settlement and custody amounts recorded USD 490.7 billion and USD 100.6 billion, respectively, marking growth of 51.7% and 39.3% compared to the previous year.

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