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| Korea Securities Depository (KSD) CEO Lee Byung-rhae speaks during a press conference held in Yeouido, Seoul, Aug. 27. / Korea Times file |
By Kim Bo-eun
The electronic securities system will go into effect Monday, with expectations that it will make the capital market more transparent and efficient, as well as save costs, the Financial Services Commission (FSC) said Sunday.
Under the system, the issuance, circulation and corporate actions associated with securities will be processed electronically, meaning that all listed stocks and bonds will not exist in paper form.
The Korea Securities Depository, led by CEO Lee Byung-rhae, will be in charge of monitoring the process of electronic issuance and circulation, the FSC said.
The new system is expected to improve efficiency and transparency of the capital market and enable further growth.
Investors will be able to trade and manage securities in a safer manner, as risks arising from the circulation of physical securities, including counterfeiting, robbery and loss, will be removed.
They will also be able to receive information on the issuing and circulation of securities faster through the electronic system.
For issuers, stock issuance procedures will be streamlined and financing costs reduced. The new system is estimated to save 180.9 billion won annually and an accumulated 904.5 billion won for the next five years.
Out of the 36 member states of the OECD, 34 now have an electronics securities system. In Northeast Asia, China, Japan and Taiwan have implemented the system.
The FSC drew up a task force for the electronics security system in Sept. 2014, and a law on the system was promulgated in 2016.
Shareholders who failed to deposit their securities by the Aug. 21 deadline need to visit the Korea Securities Depository, KB Kookmin Bank or KEB Hana Bank.
