Korea Securities Depository launches system for pension-linked retail government bonds

Retail bonds accessible via DC, IRP accounts

Subscription set for September; 10- and 20-year maturities eligible

KSD to handle issuance through redemption in integrated system

From left: Kim Do-hyun, executive vice president of Korea Investment & Securities; Ko Jin-seong, standing director of Korea Securities Depository; Jang Hyo-sun, senior vice president of Samsung Securities; Hong Sun-ok, deputy president of NH NongHyup Financial Group; Jo Young-soon, deputy president of Hana Bank; Lee Yun-su, president of Korea Securities Depository; Heo Jang, second vice minister of the Ministry of Economy and Finance; Seo Myeong-seok, director of labor standards policy at the Ministry of Employment and Labor; Heo Seon-ho, CEO of Mirae Asset Securities; Jeong Hwan, senior vice president of NH Investment Securities; Song Sang-eun, executive vice president of KB Securities; Lee Jae-gyu, deputy president of Shinhan Bank; Kim Min-su, executive vice president of Korea Securities Depository; Heo Seung-cheol, director of national treasury policy at the Ministry of Economy and Finance (Korea Securities Depository)

Korea Securities Depository said Thursday it held a ceremony to mark the launch of its integrated system for pension-linked retail government bonds.

The event, held at the Conrad Seoul hotel in Yeouido, drew about 80 guests, including KSD President Lee Yun-su, Second Vice Minister of Economy and Finance Heo Jang, Ministry of Employment and Labor Director of Labor Standards Policy Seo Myeong-seok, and executives from eight retirement pension providers.

The pension-linked retail government bond regime allows individuals to invest directly in 10-year and 20-year retail government bonds through defined-contribution (DC) or individual retirement pension (IRP) accounts. The system is set to launch in September, with a subscription window running from Sept. 9 to Sept. 15.

KSD said it has built an integrated operations system capable of handling the entire lifecycle of pension-linked retail government bonds — from issuance and principal-and-interest repayment to cancellation. The system also aggregates subscription orders received from multiple pension providers and allocates them down to individual customer accounts.

"Korea Securities Depository has connected networks with various retirement pension providers to build the infrastructure that allows individuals to easily invest in retail government bonds through their DC or IRP accounts," President Lee said in his address. "This has been a valuable opportunity to strengthen our position as a core capital market infrastructure institution capable of delivering fair and transparent allocation results to the public."

Lee added that KSD would continue working to ensure the pension-linked retail government bond — the product of joint efforts by two ministries and multiple market participants — takes firm root in the public's asset portfolios.

Vice Minister Heo said the pension-linked retail government bond carries significant meaning for both citizens' retirement security and the government bond market. "The introduction of pension-linked retail government bonds will expand the public's investment choices within retirement pension accounts, improve the stability and returns of retirement assets, and help broaden the base of demand for government bonds," he said.

moon@heraldcorp.com