KSD Publishes Guide on Utilizing Government Bonds for Foreign Investors

Korea Securities Depository (KSD) has published a guide on utilizing government bonds for foreign investors.

According to KSD on August 31, this guide was prepared in anticipation of increased demand for transactions utilizing Korean government bonds as collateral, as Korean government bonds were included in the World Government Bond Index (WGBI) in April this year, and as foreign investor demand for Korean government bonds continues to grow.

Last month, the government announced a roadmap for the internationalization of the won. As part of efforts to improve the usability of won-denominated bonds held by foreigners and to boost incentives for investment in won-denominated assets, the government plans to enhance the use of government bonds and other instruments as collateral domestically, as well as allow offshore lending transactions. The government specifically listed the preparation and distribution of an English guide for 'non-resident government bond collateral utilization support' as one of KSD's initiatives.

The guide systematically explains relevant domestic systems, procedures for custody and use of government bonds, and key service information so that investors can reference it when using government bonds for securities financing and derivatives transactions, thereby supporting investors in better understanding the operational process.

Meanwhile, the activation of securities financing provides a foundation for foreign investors to not only hold government bonds, but also actively utilize them for transactions such as securities lending and borrowing (SLB), repurchase agreements (Repo), and over-the-counter derivative margin trades.

KSD stated, "With the publication of this guide, we expect to contribute to further increasing the utilization and investment convenience of Korean government bonds by supporting foreign investors in actively using them for financial transactions."

This content was produced with the assistance of AI translation services.