South Korea’s top financial regulator said Thursday that it is planning to introduce an electronic securities system by 2019, under which stocks and bonds do not exist as a paper form.
The Financial Services Commission said under the new system, issuance, registration and circulation of securities will be performed on an electronic basis without physical certificates.
Nearly all kinds of securities, except commercial papers and investment contract securities, will be subject to the paperless system, the FSC added.
The adoption of the electronic securities system is expected to save costs for issuing paper securities worth an annual 50 billion won ($45.7 million) on average, the FSC said.
“The electronic securities system is expected to beef up efficiency in the local equity market,” said Kim Hak-soo, director general of the capital market bureau at the FSC. “It is also part of the FSC efforts to boost financial technology, or fintech.”
Kim stressed that the FSC has bolstered security networks to deter any possible hacking attempts.
The Korea Securities Depository Corp. will be in charge of monitoring the process of electronic issuance and circulation.
The FSC said it will implement the system as early as 2019 after a three-year trial period.
The FSC has prepared the introduction of the electronic system for nearly 10 years and as a precursor, it launched the electronic securities system in 2012 for financial instruments with a maturity of one year or less issued by corporations for the purpose of short-term funding. (Yonhap)
