Clearstream first ICSD to receive Qualified Foreign Intermediary status in Korea to operate omnibus account structure for Korea Treasury Bonds and Monetary Stabilisation Bonds

30.03.2023

Clearstream is the first international central securities depository (ICSD) to receive the Qualified Foreign Intermediary (QFI) status from the National Tax Service (NTS) in Korea. The QFI status is a step further towards allowing Clearstream to offer its omnibus account services, with tax exemption on interest income and capital gains on Korea Treasury Bonds (KTBs) and Monetary Stabilisation Bonds (MSBs) in the Korean market. A respective Memorandum of Understanding (MoU) was signed on 1 December 2022.

Currently, Clearstream is the only ICSD that provides access to the Korean market via the traditional Investor Registration Certificate (IRC) investment route. Once the new omnibus account structure is in place, foreign investors will no longer be required to apply for an IRC or open segregated accounts with a local custodian in Korea but can instead settle and safekeep KTBs and MSBs directly via their existing Clearstream accounts. This will bring more convenience and flexibility to KTB and MSB investments and allow foreign investors to benefit from the tax exemption on interest income and capital gains on these securities.

The granting of the QFI status is a significant step towards re-establishing the omnibus account structure and a cross-border link with the Korea Securities Depository (KSD) that will offer international investors efficient post-trade access to KTBs and MSBs in Korea.

Further details regarding Clearstream’s activation of its cross-border link with the KSD will be shared in due course.