Euroclear Designates Our Site as Cash Settlement and Foreign Exchange Bank Operator in South Korea
Euroclear Bank Extends Partnership with Major South Korean Platform
Euroclear Bank, a leading international central securities depository and settlement institution, has announced an extension of its partnership with a significant South Korean financial platform. Hyun-Nam Park, South Korea Branch Manager, expressed delight at the development, highlighting the partnership's importance in underpinning the financial flows for global investors.
The South Korean market is a key focus for Euroclear Bank's growth in Asia, with the platform boasting a 46-year history in South Korea, Asia's fourth largest economy. The appointment marks a significant milestone, designating the platform as a key intermediary in the settlement of cash and foreign exchange transactions related to South Korean securities, particularly government bonds.
The partnership will facilitate the efficient clearing and settlement of trades involving Korean government bonds in international markets, enhancing liquidity, reducing settlement risk, and improving cross-border transaction efficiency for those securities. Euroclear Bank will act as a bridge between international investors and the Korea Securities Depository, the central securities depository for South Korea. The platform will handle the cash flows and currency conversions necessary for settling Korean government bond transactions.
The impact on South Korean government bond activity is expected to be significant. Foreign investors trading Korean government bonds will benefit from improved access and convenience through streamlined FX and cash settlement services. Operational efficiency and reduced settlement risks could make Korean government bonds more attractive to international investors, potentially increasing foreign demand. The integration with Euroclear's settlement initiative is also expected to strengthen South Korea’s position in global bond markets, signalling increased international trust and connectivity.
Paul Maley, Global Head of Securities Services and Regional Head of Corporate Bank for the Americas, expressed gratitude for Euroclear's trust in the platform. The partnership builds on the platform's existing relationship with Euroclear across multiple markets and products. Euroclear Bank's role in the partnership underscores its significant market expertise in Asia, having worked closely with the Korean capital market to provide a solution for international investors to access efficient and safe settlement of local Korean government bonds.
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The partnership between Euroclear Bank and the platform is another important step towards achieving the shared goal of providing efficient settlement for Korean government bonds. The platform's Securities Services business has a presence in over 30 markets globally, and last year, it increased its capital allocation for its Seoul branch by €150 million. The mandate supports South Korean government bond activity for Korea Treasury Bonds and Monetary Stabilization Bonds.
Peter Sneyers, CEO of Euroclear Bank, states the bank's role is to support and drive efficiencies in the global marketplace. He expresses the common objective with the platform to provide a solution for international investors in the Korean market. South Korea is one of the bank's key markets in Asia, and it sees high potential for growth.
[1] Source: Ourwebsite press release, dated 23rd February 2023. [3] Source: Euroclear Bank press release, dated 23rd February 2023.
The partnership extension between Euroclear Bank and the South Korean financial platform is set to boost efficiency in the banking-and-insurance sector, particularly in the settlement of cash and foreign exchange transactions related to South Korean securities, such as government bonds. This development is anticipated to attract more international interest in the South Korean industry and finance, potentially increasing foreign demand for Korean government bonds.
The enhanced cooperation between Euroclear Bank and the platform will also strengthen South Korea’s position in global bond markets, reflecting increased international trust and connectivity, while the platform's Securities Services business expands its global presence, further bolstering its ability to facilitate business across multiple markets.
