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STP In Korean Securities Market

VISION 2015 We bridge Asia and the rest of the world as Global Partner with internationally compatible investment services. STP In Korean Securities Market. 2008. 6. 2. Korea Securities Depository. Table of Contents. Ⅰ. Overview. Ⅱ . STP in Front Office. Ⅲ. InSet System.

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STP In Korean Securities Market

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  1. VISION 2015 We bridge Asia and the rest of the world as Global Partner with internationally compatible investment services STP In Korean Securities Market 2008. 6. 2. Korea Securities Depository

  2. Table of Contents Ⅰ. Overview Ⅱ. STP in Front Office Ⅲ. InSet System Ⅳ. Statistics Ⅴ. Future Plan

  3. Ⅰ. Overview-KSD • KSD is the only CSD providing custody, clearing and settlement services in Korean Market • Settlement services include • Exchange and Non-exchange transactions • Stock, Bond (Corporate, Government), Money Market Instrument (CD, CP), Trust Unit, Mutual Fund, etc. • Settlement Volume (KRW trillion) • 2,168(’05)→ 2,233(’06)→ 2,430(’07) -1-

  4. Broker Broker Broker Broker Investment manager Investment manager Ⅰ. Overview-Korean Market Non-exchange Exchange Front office Trade Orders (Tel, E-mail ) Trade report (Tel, Fax, E-mail ) Matching Allocation (Fax, E-mail ) Back office Affirmation (Fax, E-mail ) Trust bank Settlement Settlement Bank Settlement Bank -2-

  5. Broker2 Broker3 Broker4 Broker1 OMS FIX Engine FIX HUB Ⅱ. STP In Front Office • Samsung Investments introduced FIX System in 2003… • 43 Brokers, 11 Investment Managers -3-

  6. Next Generation Sys(’10.5) 4Stage 3 Stage • FundNet (’04.4) 2 Stage • Bond(’99.11) 1 Stage • Introduction (’90.2) Ⅲ. InSet-History • KSD introduced InSet System (Institutional Settlement System) in 1990… -4-

  7. Ⅲ. InSet-Characteristics • Linkage between matching system and book-entry system • Stock (ETF, ELW), Bond (CD, CP) • Delivery Versus Payment • DVP1(Bond), DVP3(Stock) • Central Bank Money • Network • CCF / Web • Message format / Code • Proprietary Message format / ISIN(ISO6166) -5-

  8. Broker Broker Institutional Investor Institutional Investor 1.Trade report (CCF) 1.Trade report (Web) 5. Settlement statement (Web) 2.Affirmation (Web) 5.Settlement statement (Web) Ⅲ. InSet – Stock (Institutional Investor) Orders (Tel, E-mail ) Trade Matching 3. Matching 4. Netting 6. Blocking 9. Securities transfer 10.Settlement result (Web) 10.Settlement result (Web) Settlement 7.Money transfer instruction (CCF) 8.Money transfer result (CCF) 7.Money transfer instruction 7.Money transfer instruction -6-

  9. Broker Broker Investment manager Investment manager 1.Trade report (CCF) 1.Trade report (CCF) 4. Allocation (CCF) 8.Settlement statement (Web) 5. Affirmation (Web) 2. Allocation (CCF) 8.Settlement statement (Web) Ⅲ. InSet – Stock (Fund) Orders (FIX, Tel ) Trade FundNet 3. Matching (1.2) Matching 6. Matching (1.5) Trust bank 7. Netting 9. Blocking 12. Securities transfer 13.Settlement result (Web) 13.Settlement result (Web) Settlement 10.Money transfer instruction (CCF) 11.Money transfer result (CCF) 10.Money transfer instruction 10.Money transfer instruction -7-

  10. Broker Broker Foreign institution Foreign Institution 1.Trade report (Web) 1.Trade report (CCF) 5.Settlement statement (Web) 8.Settlement statement (Web) 2. Affirmation (Web) Ⅲ. InSet – Stock (Non-resident) Orders (FIX, Tel ) Trade NOE NOE Allocation Trade report Trade report Matching Local custodian 3. Matching 4. Netting 6. Blocking 9. Securities transfer 10.Settlement result (CCF) 10.Settlement result (CCF) Settlement 7.Money transfer instruction (CCF) 8.Money transfer result (CCF) 7.Money transfer instruction 7.Money transfer instruction -8-

  11. Dearer Dealer Institutional Investor Institutional Investor 3. Settlement statement (Web) 1.Trade report (CCF) 3.Settlement statement (Web) 1.Trade report (Web) Ⅲ. InSet – Bond (Institutional Investor) Trade (Tel, E-mail ) OTC Trade Matching 2. Matching 4. Blocking 7. Securities transfer 8.Settlement result (Web) 8.Settlement result (Web) Settlement 5.Money transfer instruction (CCF) 6.Money transfer result (CCF) 4.Money transfer instruction 4.Money transfer instruction -9-

  12. Dealer Dealer Investment manager Investment manager 4. Allocation (CCF) 1.Trade report (CCF) 1.Trade report (CCF) 7.Settlement statement (Web) 5. Affirmation (Web) 2. Allocation (CCF) 7.Settlement statement (Web) Ⅲ. InSet – Bond (Fund) Trade (Tel, E-mail ) OTC Trade FundNet 3. Matching (1.2) Matching 6. Matching (1.5) Trust bank 8. Blocking 11. Securities transfer 12.Settlement result (Web) 12.Settlement result (Web) Settlement 9.Money transfer instruction (CCF) 10.Money transfer result (CCF) 9.Money transfer instruction 9.Money transfer instruction -10-

  13. Ⅳ. Statistics-Stock • Total 207 participants (2007) -11-

  14. Ⅳ. Statistics-Stock • Trading volume by InSet vs Settlement volume by InSet Trillion won (82%) (82%) (82%) (79%) (48%) -12-

  15. Ⅳ. Statistics-Bond • Total 238 participants (2007) -13-

  16. Ⅳ. Statistics-Bond • Trading volume by InSet vs settlement volume by InSet Trillion won (74%) (74%) (73%) (76%) (49%) -14-

  17. Ⅴ. Future plan • Next generation IT System project will be completed in May 2010 • The project plans to introduces in InSet System • CCF in all settlement processes • ISO 15022 -15-

  18. Thank you!

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