SEOUL, March 23 (Korea Bizwire) – Government officials have announced the adoption of a new electronic bond system. Using the new method, ownership can change hands without any the completion of any physical paperwork, as the securities are electronically registered.
The Korea Securities Depository (KSD) announced that the bill regarding electronic registration of securities and bonds passed on March 22.
The electronic bond system allows individuals to hand over, establish securities, and exercise share rights without having to issue actual paper certificates.
Officials at the KSD commented that they hope to implement the system as soon as possible in cooperation with the government, the financial industry, and issuing corporations, considering that Korea is rather late in adopting this type of electronic system compared to other countries.
Once implemented, the system is expected to cut issuance and financing costs, and speed up the entire process. Also, it could prevent stock certificates from being forged or lost, and improve trading transparency.
The system will be operated by electronic registration agencies and account management institutes. Quoted shares, private and government bonds, and beneficiary rights of investment trusts will be required to be registered electronically. Companies with unlisted shares will also be able to make use of the electronic bond system if required.
Officials at the KSD explain that they will be managing a ‘client consultative group’ to collect various ideas from security companies, banks, insurance companies, and companies issuing stocks. In addition, a team devoted exclusively to the new system will be created within the KSD.
By Francine Jung (email@example.com)