South Korea: Korea Securities Depository to implement partial settlement on listed securities - update
Note: This announcement, originally published on 7 June 2021, has been further updated to reflect new impacts on customers. Changes have been highlighted.
Clearstream Banking1 informs customers that effective
10 June 2021
the Korea Securities Depository (KSD) will implement partial settlement on listed securities (excluding fixed income) trades, on its Institutional Settlement (INSET) system, that exceed a settlement amount of KRW 10 billion. The purpose of the KSD is to reduce settlement delay or failure caused by such large value transactions. Therefore, should there be such transactions that unexpectedly cannot settle, partial settlement will be automatically initiated without counterparties’ consent. A settlement amount of up to a KRW 10 billion unit mark will settle if available, and fail for the last KRW 10 billion unit batch not available.
Impact on customers
For eligible listed securities (excluding fixed income), customers are advised that against payment transactions with domestic counterparties can only be in amounts of up to KRW 10 billion to prevent potential compulsory partial settlement in the market.
Such instructions that exceed the limit of KRW 10 billion shall be rejected by CBL. Impacted customers shall be informed of such rejections via SWIFT MT548 and expected to re-instruct in smaller amounts.
Note: Clearstream Banking shall not be responsible for any loss, claim, liability and/or expense in relation to partial settlement in the market. Customers who do not adhere to the above requirement to prevent potential compulsory partial settlement in the market shall undertake to hold Clearstream Banking harmless and indemnify Clearstream Banking from any such loss, claim, liability and/or expense in relation to partial settlement in the market.
The Market Link Guide – South Korea will be updated accordingly.
For further information, customers may contact Clearstream Banking Client Services or their Relationship Officer.
1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.