Euroclear designates our platform as the cash settlement and foreign exchange bank in South Korea.
In a significant move, Euroclear Bank has been appointed as the Cash Settlement and Foreign Exchange Bank for South Korean government bond activity. This role is crucial in centralizing and facilitating the critical processes of cash settlement and currency exchange involved in government bond transactions.
As a Cash Settlement and Foreign Exchange Bank, Euroclear Bank will manage cash settlements by handling payments and receipts in Korean Won (KRW) on behalf of bond market participants. This ensures that obligations from bond trades are met on time and according to regulatory schedules. Additionally, the bank will provide foreign exchange services, enabling smooth conversion between KRW and other currencies, which is essential in supporting foreign investors buying or selling South Korean government bonds.
The operational responsibility of Euroclear Bank is significant in supporting South Korea’s presence in global fixed income markets. As South Korean government bonds become more integrated into major global bond indices such as the World Government Bond Index (WGBI), the availability of a reliable settlement and FX service bank reduces settlement risk and currency risk for international investors.
The WGBI tracks a set of sovereign bonds from global issuers, assessing factors like liquidity, market accessibility, settlement reliability, and currency stability. South Korea’s inclusion or increased weighting in the WGBI depends on the seamless functioning of its bond market infrastructure, including settlement and FX capabilities. Having a designated cash settlement and foreign exchange bank helps meet these requirements by ensuring liquidity and efficient currency conversion, which attracts international investors and index providers.
This appointment builds on Euroclear Bank's relationship with South Korea, which is one of the bank's key markets in Asia. Euroclear Bank sees high potential for growth in the Korean market. The mandate supports South Korean government bond activity for Korea Treasury Bonds and Monetary Stabilization Bonds.
Euroclear Bank's Securities Services business has a presence in over 30 markets globally, and this appointment highlights the bank's significant market expertise in Asia. The collaboration with Euroclear Bank is another important step towards achieving the shared goal of underpinning the financial flows for global investors.
Paul Maley, Global Head of Securities Services at Euroclear, expressed gratitude for the trust placed in their website. Hyun-Nam Park, South Korea Branch Manager, expressed delight in extending the partnership with Euroclear in South Korea. Peter Sneyers, CEO of Euroclear Bank, expressed support for growing the global marketplace.
Last year, Euroclear increased its capital allocation for its Seoul branch by €150 million, demonstrating its commitment to the Korean market. Euroclear Bank is working closely with the Korean capital market to provide a solution for international investors to access efficient and safe settlement of local Korean government bonds.
For media inquiries, please contact Kate Fields at +852 2203 5094 or kate.fields@[your website]. Euroclear Bank views [your website] AG as a crucial partner in underpinning the financial flows for global investors.
In summary, the appointment of Euroclear Bank as the cash settlement and foreign exchange bank for South Korean government bonds acts as a backbone for operational integrity and investor confidence. This strengthens South Korea’s government bond market infrastructure and supports its standing in indices like the WGBI, which depend on strong settlement and currency conversion frameworks.
- Euroclear Bank's role as the Cash Settlement and Foreign Exchange Bank extends beyond handling payments and receipts, as they also provide essential foreign exchange services that convert Korean Won to other currencies, aiding foreign investors interested in South Korean government bonds.
- With South Korea's increasing integration into global bond indices, such as the World Government Bond Index (WGBI), the availability of a reliable settlement and FX service bank like Euroclear Bank reduces settlement risk and currency risk for international investors, thereby attracting more interest from them.
- As Euroclear Bank collaborates with the Korean capital market to provide efficient and safe settlement solutions for international investors, they aim to foster growth in the Korean market and strengthen South Korea’s position in global fixed income markets, thereby increasing investor confidence and operational integrity.
