Woori Bank Became the First Bank in South Korea to Complete a Government Bond Transaction Through an ICSD
South Korea’s Woori Bank became the first bank in the country to complete a government bond transaction with a foreign financial institution through an international securities settlement system. The bank sold and settled South Korean treasury bonds through an international central securities depository (ICSD) and also carried out related foreign exchange and hedging transactions.
According to the Korea Herald, international central securities depositories, including Euroclear and Clearstream, enable global investors to trade South Korean government bonds through omnibus accounts maintained by the Korea Securities Depository. This eliminates the need to appoint a separate local custodian or open individual accounts.
For more breaking news, follow the UA.News Telegram channel.
Previously, Korean financial institutions were unable to directly supply government bonds to foreign investors through an offshore settlement network. In January, authorities introduced guidelines allowing local banks and securities firms to directly trade and settle government bonds with foreign investors through the ICSD.
South Korea is expanding access to its government bond market amid its phased inclusion in the FTSE Russell World Government Bond Index. The process began in April and involves eight equal monthly stages. Woori Bank stated that the new channel will enable the integration of government bond transactions with South Korean won conversion, currency derivatives, and currency hedging services for global institutional investors.
