KSD – Past, Present & Future

Myeong-Hoon Lee

Managing Director

Korea Securities Depository

October 5, 2005

2

Outline

KSD – Past History and Timeline From Humble Beginnings To Prosperous Future KSD – Present Core and Value-added Services From Serving the Domestic Market to Serving the

International Market KSD – Future Hub of Securities Market in Korea Ubiquitous & Convergent Securities Service Administrator

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KSD – History and Timeline

• FundNet launching • Intl. Consulting & Infra Export• IT Back-up Center

Mature Phase(2000-2005)Growth Phase

(1994-1999)

• KSD reborn on SEA • International Services• OTC Bond DVP settlement• SLB, Repo, etc.

Initial Phase(1974-1993)

• KSSC Established• Centralized Deposit• Beneficiary shareholder system introduced

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KSD –Roles & Functions

DepositDepositDepositDeposit

Collateral Collateral ManagementManagement Collateral Collateral

ManagementManagement International International ServicesServices

International International ServicesServices

Other Other ServicesServices

Other Other ServicesServices

Settlement Settlement

Primary Primary MarketMarket

Primary Primary MarketMarket

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KSD – Core Services

• Securities Settlement Services for Market Transactions (KRX) • OTC Bond Settlement on a DVP basis by linking with BOK • Institutional Settlement Services for Institutional Investors • Settlement Services for Free Board • Indirect Investment Asset Settlement through FundNet

• Blanket Deposit • Corporate Action Services based on Centralized Deposit • Indirect Investment Asset Deposit through FundNet • New Derivatives and Short-term Financial Instruments Deposit

Deposit

Settlement

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KSD – Other Services

• Securities Lending and Borrowing Intermediary Service • Repo/ Covered Call/ OTC Derivatives

• Transfer Agent Services (title transfer, stock issuance, notification) • Bond Registration Service (registration, transfer of bonds, pledging)

• Cross-border Securities Deposit & Settlement Services • Custody of DR Underlying Shares/ Local Custody/ CB, BW, EB

Intl. Services

Primary Market

Collateral Magt.

• Domestic and International Consulting Services • Information Provision Service

Other Services

7

KSD –International Cooperation

International Business Cooperation Business Agreement with JSSC (Japan) - Dual listing between Korean and Japanese Market SLB & Repo Project with SET/TSD (Thailand)

- Dispatched 7 SLB, Repo, and IT experts to Thailand * First Infrastructure Export to a Foreign Market

International Consulting Services Expert dispatch, Invitational training, etc. Beneficiary States - Uzbekistan, Vietnam, Indonesia, the Philippines, etc.

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KSD – Future Plan

Domestic Front Introduction of Electronic Securities System Establishment of Electronic Voting System

International Front Full support to the Asia Bond Market

Initiative (ABMI) CSD Linkage to facilitate global listing

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KSD – Future Vision

Vision for Domestic Market Hub of Securities Market in Korea Hub of Securities Information Ubiquitous & Convergent Securities Service Pr

ovider

Vision for International Market Hub of Northeast Asia Securities Market Major Contributor to Global Market

- CSD9(2007)

Thank You