The Korea Securities Depository (KSD) announced on the 17th that the government bond integrated account established with the International Central Securities Depositories (ICSD) surpassed a balance of 1 trillion won in just three months since its opening, attracting significant interest from foreign investors.
The integrated account for government bonds began system operations on June 27, with small-scale pilot transactions by foreign investors, and transaction volumes have significantly increased since last month.
On October 8, notably reflecting foreign investors’ expectations following the announcement by FTSE Russell to include Korean government bonds in the World Government Bond Index (WGBI), the balance exceeded 1 trillion won. The total transaction value through the government bond integrated account has also rapidly exceeded a cumulative 7.5 trillion won.
The swift and stable utilization of the government bond integrated account by foreign investors is the result of joint efforts by the KSD, Ministry of Economy and Finance, Financial Services Commission, and other financial authorities.
The KSD began constructing the integrated account for government bonds in December 2022, developing a cross-border government bond trading system and engaging in institutional support for regulatory improvements and overseas promotion activities.
Through more than 180 practical meetings with the ICSD, the KSD enhanced the system’s completeness and acted as a bridge to convey various foreign investor opinions to financial authorities. They also made concerted efforts to meet with 109 global investment institutions across 13 sessions in major financial centers like Japan, London, Singapore, and Hong Kong, explaining the unique features of the government bond integrated account system and encouraging its use.
Notably, Lee Sun-ho, President of the KSD, laid the groundwork for opening by signing a contract on the construction and operation of the government bond integrated account at the ICSD headquarters last August, and in May this year, formally confirmed the launch date of the service by directly negotiating with the management of Euroclear Bank to remove uncertainties.
A KSD representative stated, “We will continue to listen to foreign investors’ voices to refine the system and enhance investors’ convenience, and support the government efforts for the scheduled inclusion of Korean government bonds in the WGBI in November next year without any issues. Additionally, we will extend the deadline for settlement processing of foreign investors’ bond transactions from 10 a.m. to 1 p.m., securing extra time for currency exchange and settlement instructions.”