亞開行-大韓民國債券市場：東盟+3債券市場指南更新（英）

THEBONDMARKETIN

THEREPUBLICOFKOREA

ANASEAN+3BONDMARKETGUIDEUPDATE

MAY2024

THEBONDMARKETIN

THEREPUBLICOFKOREA

ANASEAN+3BONDMARKETGUIDEUPDATE

MAY2024

ASIANDEVELOPMENTBANK

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Notes:

Inthispublication,internationalstandardsfornamingconventions—InternationalOrganizationforStandardization(ISO)3166foreconomycodesandISO4217forcurrencycodes—areusedtoreflectthediscussionsoftheASEAN+3BondMarketForumtopromoteandsupport

implementationofinternationalstandardsinfinancialtransactionsintheregion.ASEAN+3comprisestheAssociationofSoutheastAsianNations(ASEAN)plusthePeople’sRepublicofChina,Japan,andtheRepublicofKorea.

TheeconomiesofASEAN+3asdefinedinISO3166includeBruneiDarussalam(BN;BRN);Cambodia(KH;KHM);thePeople’sRepublicofChina(CN;CHN);HongKong,China(HK;HKG);Indonesia(ID;IDN);Japan(JP;JPN);theRepublicofKorea(KR;KOR);theLaoPeople’sDemocraticRepublic(LA;LAO);Malaysia(MY;MYS);thePhilippines(PH;PHL);Singapore(SG;SGP);Thailand(TH;THA);andVietNam(VN;VNM).

ThecurrenciesofASEAN+3asdefinedinISO4217includetheBruneidollar(BND),Cambodianriel(KHR),Chineserenminbi(CNY),Hong

Kongdollar(HKD),Indonesianrupiah(IDR),Japaneseyen(JPY),Koreanwon(KRW),Laokip(LAK),Malaysianringgit(MYR),Philippinepeso(PHP),Singaporedollar(SGD),Thaibaht(THB),andVietnamesedong(VND).

ADBrecognizes“Hongkong”and“HongKong”asHongKong,China;“Korea”and“S.Korea”astheRepublicofKorea;and“Korean”asreferringtotheRepublicofKorea.

Contents

Note:ThechapterandsectionnumberingreflectthatoftheASEAN+3BondMarketGuide

RepublicofKorea2018andincludesonlythechaptersandsectionsbeingupdated.

TablesandFiguresiv

Acknowledgmentsv

Abbreviationsvi

I.Overview

1

A.Introduction

1

II.LegalandRegulatoryFramework

5

C.LegislativeStructure

5

D.KoreanBondMarketRegulatoryStructure

8

E.RegulatoryFrameworkforDebtSecurities

9

G.ContinuousDisclosureRequirementsintheKoreanBondMarket10

H.Self-RegulatoryOrganizationsintheKoreanBondMarket

12

I.RulesRelatedtoLicensingandTradingConventions

13

J.RulesRelatedtoBondListingorRegistration,Trading,andDisclosure13

K.MarketEntryRequirements(Nonresidents)

14

M.RegulationsandLimitationsRelevantforNonresidents

17

III.CharacteristicsoftheKoreanBondMarket

21

A.DefinitionofSecurities

21

B.TypesofBondsandNotes

23

E.MethodsofIssuingBondsandNotes(PrimaryMarket)

26

G.LanguageofDocumentationandDisclosureItems

27

H.RegistrationofDebtSecurities

28

I.ListingofDebtSecurities

29

IV.BondandNoteTransactionsandTradingMarketInfrastructure

31

A.TradingofBondsandNotes

31

F.BondInformationServices

32

J.InterestRateandFixed-IncomeFutures

34

K.CriticalBenchmarkRates[New]

34

VI.BondMarketCostsandTaxation

37

B.ListingFees

37

C.OngoingCostsforIssuersofCorporateBondsandNotes

37

H.TaxationFrameworkandRequirements

38

VII.MarketSizeandStatistics

43

X.RecentDevelopmentsandFutureDirection

44

A.RecentMajorDevelopments

44

B.FutureDirection

49

Appendixes

2PracticalReferences

51

4GlossaryofTechnicalTerms

52

TablesandFigures

Tables

2.1ExamplesofSecuritiesMarketLegislationandRegulationsbyLegislativeTier

5

2.4ComparisonofOmnibusAccountTypes

19

3.5ExamplesofDeterminingtheSuccessfulBiddingYieldbyAuctionType26

6.4DutiesandTaxesonFixed-IncomeSecuritiesintheRepublicofKorea38(ForNonresidentsandForeignCorporations)

6.5OverviewofAlternativeDocumentsinLieuofaCertificateofResidence41

Figures

1.1LocalCurrencyBondsOutstandingintheRepublicofKorea,2018–20232(USDbillion)

1.2LocalCurrencyBondsOutstandingintheRepublicofKorea,2018–20233(KRWbillion)

1.3TheRepublicofKorea’sLocalCurrencyBondMarketSizeversus4SelectedMarkets(%ofGDP)

4.1aTradingVolumebyBondTypeintheExchangeMarket,2018–2023

3

1

4.1bTradingVolumebyBondTypeintheOver-the-CounterMarket,2018–202332

4.8KoreaExchange’sSociallyResponsibleInvestmentBondsWebPage33

4.9ScreenshotofKoreaOvernightFinancingRepoRateWebsite

3

5

4.10ScreenshotofKoreaFinancialInvestmentAssociationBondInformation36Service’sCertificateofDepositRatesWebPage

Acknowledgments

TheASEAN+3BondMarketGuideRepublicofKoreawaspublishedinMay2018.1Sincethen,

andparticularlygivenrecentannouncements,theKoreanbondmarkethasundergone

significantchangeaspartoflargerreformsintheKoreancapitalmarket.Assuch,anupdate

oftheoriginalASEAN+3BondMarketGuideRepublicofKoreahasbecomenecessary.2

ThisupdatenotewascompiledbyShigehitoInukaiandMatthiasSchmidt,Asian

DevelopmentBank(ADB)consultants,withsignificantcontributionsfromJiwoongChoi

andEunjaeShin,financialsectorspecialistsintheEconomicResearchandDevelopment

ImpactDepartmentofADB.

TheASEAN+3BondMarketForum(ABMF)teamwishestothanktheBankofKorea,the

FinancialServicesCommissionandFinancialSupervisoryService,KoreaExchange,the

KoreaFinancialInvestmentAssociation,aswellastheKoreaSecuritiesDepositoryand

ABMFInternationalExperts,particularlyCitibankKoreaInc.,DeutscheBankAGSeoul

Branch,andtheHongkongandShanghaiBankingCorporationSeoulBranchfortheirinputs

andreviewofthisupdatenote.SpecialthanksgototheMinistryofEconomyandFinanceof

theRepublicofKoreaforitsstrongsupport.

Inaddition,theABMFteamacknowledgesinputsfromLeelarkPark,formerADBconsultant;

JoongShikLee,ADBconsultant;aswellasKoreanbondmarketparticipantsthatarenot

ABMFmembers,includingKookminBank,whocontributedtheirtimeandexpertisein

supportofthisupdatenote.

Nopartofthisupdatenoterepresentstheofficialviewsoropinionsofanyinstitutionthat

participatedinthisactivityasanABMFmember,observer,orexpert.TheABMFSub-

Forum1teambearssoleresponsibilityforthecontentsofthisupdatenote.

ThisupdatenoteandthoserelatingtootherASEAN+3bondmarketsareavailablefor

downloadfromAsianBondsOnline.3

May2024

ASEAN+3BondMarketForum

1ADB.2018.ASEAN+3BondMarketGuideRepublicofKorea.Manila.

/abmg.php#kor

-2018.

2ASEAN+3comprisestheAssociationofSoutheastAsianNations(ASEAN)plusthePeople’sRepublicofChina,

Japan,andtheRepublicofKorea.

3AsianBondsOnline.

.

Abbreviations

ABMF

ASEAN+3BondMarketForum

ADB

AsianDevelopmentBank

ASEAN

AssociationofSoutheastAsianNations

ASEAN+3

ASEANplusthePeople’sRepublicofChina,Japan,andtheRepublicofKorea

BOK

BankofKorea

CD

certificateofdeposit

CD91

certificateofdepositwith91-daytenor

COVID-19

coronavirusdisease

ESG

environmental,social,and(corporate)governanceprinciples

FSC

FinancialServicesCommission

FSCMA

FinancialInvestmentServicesandCapitalMarketsAct

FSS

FinancialSupervisoryService

FX

foreignexchange

GDP

grossdomesticproduct

ICSD

internationalcentralsecuritiesdepository

ICMA

InternationalCapitalMarketAssociation

IRC

InvestorRegistrationCertificate

KCMI

KoreaCapitalMarketInstitute

KOFIA

KoreaFinancialInvestmentAssociation

KOFR

KoreaOvernightFinancingRepoRate

KOSPI

KoreaCompositeStockPriceIndex

KRW

Koreanwon(ISOcode)

KRX

KoreaExchange

KSD

KoreaSecuritiesDepository

KTB

KoreaTreasuryBond

KTBi

KoreaTreasuryBond(inflation-linked)

KYC

knowyourcustomer

K-GBG

KoreaGreenBondGuidelines

LEI

LegalEntityIdentifier

LCY

localcurrency

LIBOR

LondonInterbankOfferedRate

MOE

MinistryofEnvironment

MOEF

MinistryofEconomyandFinance

MOJ

MinistryofJustice

MSB

MonetaryStabilizationBond

NTS

NationalTaxService

OTC

over-the-counter

Abbreviationsvii

QFI

QualifiedForeignIntermediary

QIB

QualifiedInstitutionalBuyer

RFI

RegisteredForeignInstitution

SRI

sociallyresponsibleinvestment(bonds)

SRO

self-regulatoryorganization

USD

UnitedStatesdollar(ISOcode)

USD1=KRW1,346.80asof29March2024

(officialratefromSeoulMoneyBrokerage)

Overview

A.Introduction

ThebondmarketintheRepublicofKoreaisundergoingsignificantchangesaspartoflarger

reformsintheKoreancapitalmarket.Policymakersandregulatoryauthoritiesrecognizedthe

needtomaketheKoreanmarketmoreinvestor-friendlyoverallandmoreaccessibleto

foreigninvestorsbyaddressingidentifiedissuesandweaknesseswithasetofpolicy

measuresannouncedasfarbackas2022—amoveseenasfavorableinviewoftheexpected

inclusionofKoreangovernmentbondsininternationalbondindicesinthecomingyears.

Quiteanumberofthesechangeswillhavebeenimplementedbythetimeofpublicationof

thisupdatenote,withothermeasuresbeingphasedintothemarketoverthenextfewyears.

Thisupdatenoteoffersinformationonthosechangesinthecontextofthestructureofthe

originalASEAN+3BondMarketGuideRepublicofKorea,withonlyrelevantsectionsbeing

displayedhere.

Mostnotably,theGovernmentoftheRepublicofKoreaabolishedtheneedfornewforeign

investorstoobtainanInvestorRegistrationCertificate(IRC)inlate2023,apracticethathad

beeninplacefornearly3decadesbutwasoftenseenasahurdletomarketentryevenifthe

actualprocesshadbecomefairlystraightforwardinrecentyears.ChapterII.Koffersa

detaileddescriptionofthenewmarketentryprocessusingtheLegalEntityIdentifier(LEI).

Policymeasuresforimprovedmarketaccessalsoincludedaliberalizationoftheforeign

exchange(FX)market,withinvestorsnowabletoconductFXtransactionswithathirdparty

orregistertobecomeadirectmarketparticipant(seedetailsinChapterII.M).

Othermeasuresalreadyimplementedincludetheexemptionofwithholdingtaxforforeign

investorsonintereststemmingfromKoreaTreasuryBonds(KTBs)andMonetary

StabilizationBonds(MSBs),asisexplainedinChapterVI.H,andtheintroductionofan

indirectmarketaccessoptionforforeignbondinvestorsviainternationalcentralsecurities

depositories’(ICSDs)useofanomnibusaccount;detailsonthelatterareavailablein

ChapterII.KandII.M.

OngoingandveryrecentchangesrelatetotheimprovementofdisclosureinEnglish(see

ChapterII.G)andtheintroductionoflong-termKTBfuturescontractsonKoreaExchange

(KRX);detailsonthelatterareavailableinChapterIV.J.

Onthelegislativeside,theintroductionoftheElectronicSecuritiesActin2019andits

subsidiaryregulations,tocementthedrivetowardadematerializedsecuritiesmarket,isalso

layingthefoundationforaformaldefinitionofdigitalassetsandtheformulationofadigital

assetframeworkandrelatedproducts,enablingfintechinnovationandtheuseofresultant

bigdata.Policymakersareexpectedtopromulgateadedicatedlaw,whileintendingto

amendexistinglawsandregulationsinlinewithinternationalbestpractice(seedetailsin

2TheBondMarketintheRepublicofKorea(UpdateMay2024)

ChapterII.C).TheimpactoftheElectronicSecuritiesAct,2019onbothmarketactorsandpracticesisexplainedinanumberofdifferentsectionsofthisupdatenote.4

Inparallelwiththeabovefeatures,theKoreanmarkethasalsobeenveryprolificinthe

introductionofsustainablefinanceinstrumentsinlinewithglobaldevelopments.Since2018,whentheKoreaDevelopmentBankissuedboththefirstgreenbondandsocialbondinthe

domesticmarket,theissuancevolumeandvarietyofsustainablefinanceinstruments—thetypicaltechnicaltermsusedintheKoreanmarketareeither“sociallyresponsibleinvestment(SRI)bonds”or“environmental,social,and(corporate)governance(ESG)bonds”—has

grownsignificantlyintheKoreanmarket.Atthesametime,theGovernmentoftheRepublicofKoreaandKoreancorporateshavealsotappedinternationalbondmarketsforsustainablefinanceinstrumentstogreateffect.Supportingthisdevelopmentistheso-called“K-

Taxonomy”andrelatedguidelines,apolicyframeworkthatdefinesSRIandESGactivities,andalsooffersincentivestoissuersofsuchbonds,asexplainedinChapterIII.Bandothersections.

Figure1.1:LocalCurrencyBondsOutstandingintheRepublicofKorea,

2018–2023(USDbillion)

USD=UnitedStatesdollar.

Note:DataasofDecember2023andincludebondsissuedbynonresidents.

Source:AsianBondsOnline.DataPortal.

/data

-

portal/?indicator=LCY_Bond_Market_USD&economies=KR&years=2021\u005e2022\u005e2023\u005e2024

(accessed13March2024).

4TheElectronicSecuritiesAct,2019(officialname:ActConcerningElectronicRegistrationofStocks/Bonds,etc.)

wasratifiedbytheNationalAssemblyin2016,butonlybecameeffectiveon16September2019,afteraperiodofdeliberationabouttheact’senforcementdecree.ThetextoftheactisavailableinEnglishfromtheKoreaLaw

TranslationCenterat

https://elaw.klri.re.kr/eng

_mobile/viewer.do?hseq=38455&type=new&key=.

Overview3

WhiletheKoreanbondmarket’ssizeremainedrelativelystableinlocalcurrency(LCY)

termsoverthe3-yearperiodendingin2023,ifmeasuredinUSdollarterms(Figure1.1),themarketpostedagrowthof21.5%comparedtothebeginningof2018,theyearinwhichthe

originalASEAN+3BondMarketGuideRepublicofKoreawaspublished.TheamountofbondsoutstandingexpandedonincreasedKTBissuancein2020and2021inresponsetothefiscalimpactofthecoronavirusdisease(COVID-19),beforeholdingrelativelysteadyinboth2022and2023.IfmeasuredinLCYterms,theoverallgrowthofthedomesticbondmarketfrom

2018to2023amountedto47.0%(Figure1.2).

Figure1.2:LocalCurrencyBondsOutstandingintheRepublicofKorea,

2018–2023(KRWbillion)

KRW=Koreanwon.

Note:DataasofDecember2023andincludebondsissuedbynonresidents.

Source:AsianBondsOnline.DataPortal.

/data

-

portal/?indicator=LCY_Bond_Market_USD&economies=KR&years=2021\u005e2022\u005e2023\u005e2024

(accessed13March2024).

TheKoreanLCYbondmarketasawholeisofsignificantsizewhencomparedtoother

regionalbondmarketsandselectedmarketsoverseas,particularlywhenmeasuredinrelationtogrossdomesticproduct(GDP)(Figure1.3).

4TheBondMarketintheRepublicofKorea(UpdateMay2024)

Figure1.3:TheRepublicofKorea’sLocalCurrencyBondMarketSize

versusSelectedMarkets(%ofGDP)

GDP=grossdomesticproduct.

Notes:GDPandbondmarketmeasuredinUnitedStatesdollarterms.DataasofDecember2022.Sources:AsianBondsOnline,BankforInternationalSettlements,WorldBank.

ThechartshowsthattheKoreanLCYbondmarketissignificantlybigger,asashareofGDP,thanmanyotherLCYbondmarketsintheregion.Itisalsolargerthanestablishedbond

marketsinsomemajoreconomiesaroundtheworld.

Itisenvisagedthatthefollow-oneffectfromtheabovementionedpolicymeasuresandthosestilltocome,includingthelikelyinclusionofKoreangovernmentbondsin

internationalbondindices,willbebeneficialforthefurthergrowthandsegmentationoftheKoreanbondmarketandthecapitalmarketoverall.

LegalandRegulatoryFramework

Thischapterreviewsthesignificantchangesorupdatestorulesandregulations,regulatory

processes,andotherofficialprescriptionsbyregulatoryauthoritiesandmarketinstitutionsin

theKoreanbondandcapitalmarketssincethepublicationoftheASEAN+3BondMarket

GuideRepublicofKorea.Thestructurefollowstheoriginalbondmarketguide,andonly

sectionswithupdatesorcorrectionsareshownineachchapter;newsubjectsareaddedat

theendofexistingsectionsandaremarkedaccordingly.

C.LegislativeStructure

Anumberofnewlaws,regulations,andruleswithrelevanceforthebondmarkethave

beenpromulgatedorintroducedintheRepublicofKoreasincethepublicationofthe

originalbondmarketguidein2018,whilemuchofthekeyandfundamentallegislation

andregulationsforthebondmarkethavebeenrevisedintheinterveningyears.Inturn,

somelawsandregulationshavebeenrescinded.Table2.1hasbeenupdatedaccordingly

foreasyreference.

Whilethenewlawsandregulationswillbereferencedorreviewedindetailinthe

relevantchaptersandsectionsofthisupdatenote,establishedandsincerevisedlaws

andregulationsareshowninthetableiftheyarealsoreferencedinthispublicationand

marked“New”iftheyappearinthetableforthefirsttime.Tableentriesarepresentedin

reversechronologicalorder.

Table2.1:ExamplesofSecuritiesMarketLegislationandRegulationsbyLegislativeTier

LegislativeTier

ContentsorSignificantExamples

Constitution

ofthe

RepublicofKorea(1988)

Principles,Rights,andObligations

Statutesand

acts

(fundamentalandkey

legislationforthemarket

andmarketparticipants)

.ActontheProtectionofVirtualAssetUsers(effective1July2024)[New]

.FinancialInvestmentServicesandCapitalMarketsAct(revised22September2023)

.ActontheEstablishment,etc.oftheFinancialServicesCommission(revised14September2023)

.CorporateTaxAct(revised1July2023)[New]

.IncomeTaxAct(revised1July2023)

.ForeignExchangeTransactionAct(revised16September2021)

.EnvironmentalTechnologyandIndustrySupportAct(revised21April2021)

continuedonnextpage

6TheBondMarketintheRepublicofKorea(UpdateMay2024)

Table2.1continued

.ActontheManagementofFinancialBenchmarksoftheRepublicofKorea(promulgated26November2019,effective24November2020)[New]

.ActonElectronicRegistrationofStocks,Bonds,etc.(promulgated22March2016,effective16September2019)[New]

.TheBankofKoreaAct(Revised13March2018)

Subsidiary

legislation

(PresidentialDecreeor

EnforcementRuleofthe

primeministerorrelevant

ministry)

.EnforcementDecreeoftheForeignExchangeTransactionAct(revised4October2023)

.EnforcementDecreeoftheBankingAct(revised22September2023)

.EnforcementDecreeoftheCorporateTaxAct(23September2023)

.EnforcementDecreeoftheIncomeTaxAct(1October2023)

.EnforcementDecreeoftheActonElectronicRegistrationofStocks,Bonds,etc.(16September2019)[New]

FinancialServicesCommission(FSC)

.FSCRegulationonFinancialInvestmentBusiness(revised22December2023)

.FSCRegulationonIssuance,PublicDisclosure,etc.ofSecurities(revised1May2023)

.FSC–MOJRegulationonAuthorization,etc.forElectronicRegistrationBusiness(September2019)[New]

.FSCRegulationonElectronicRegistrationBusiness(16September2019)[New]

.EnforcementDecreeoftheFinancialInvestmentServicesandCapitalMarketsAct(revised14December2023)

FinancialSupervisoryService(FSS)

.FSSDetailedRulesoftheRegulationonFinancialInvestmentBusiness(revised14December2023)

.FSSDetailedRegulationsonIssuance,PublicDisclosure,etc.ofSecurities(revised12April2021)

Self-regulatoryorganization

rules(e.g.,

fromKOFIA

orKRX,and

their

enforcementrules)

KoreaExchange(KRX)

.KOSPIMarketBusinessRegulation(revised19July2023)

.KOSPIMarketDisclosureRegulation(revised29March2023)

.KOSPIMarketListingRegulation(revised7December2022)

.GuidelinesforOperationofSegmentDedicatedtoSociallyResponsibleInvestmentBonds(December2019)[New]

KoreaFinancialInvestmentAssociation(KOFIA)

.RegulationsonSecuritiesUnderwritingBusiness,etc.(revised8June2023)

.GuidelinesonESGBondsRatings(January2023)[New]

.RegulationsonRegistrationandManagement,etc.ofSecuritiesforQualifiedInstitutionalBuyers(revised21August2018)

KoreaSecuritiesDepository

.RegulationonDepositServiceforSecurities(revised24November2021)

.SecuritiesLendingandBorrowingRegulation(revised24November2021)

.RegulationofElectronicRegistrationServicesforStocks,Bonds,etc.(8March2021)[New]

.RegulationonSettlementServiceforSecurities(revised28August2019)

.RegulationonBondRegistrationBusiness(revised16August2019)

ESG=environmental,social,andgovernance;KOSPI=KoreaCompositeStockPriceIndex;MOJ=MinistryofJustice.Note:IntheKoreanbondmarket,theterm“enforcement”inthecontextoflawsandregulationscanhavemultiplemeanings;itistypicallyusedtodenotetheeffectivedateofalaworregulation,oranimplementationdecree,andmaynotdescribearesponsetoaregulationorruleviolation,asmaybeexpectedinothermarkets.

Source:ASEAN+3BondMarketForum(ABMF)andABMFconstituents.

LegalandRegulatoryFramework7

1.FundamentalandKeyLegislation(StatutesandActs)

TheGovernmentoftheRepublicofKoreaannouncedanexemptionfromwithholdingtax

onKTBsandMSBsforforeigninvestors,effective1January2023.Toprovidethelegalbasisforthetaxexemption,theMinistryofEconomyandFinance(MOEF)revisedin2023the

IncomeTaxActandCorporateTaxAct,aswellastherespectiveenforcementdecreesof

thesetwoacts,whilegrantingazero-ratingtothewithholdingtaxbetweentheeffectivedateandthelaw’schange.

AkeyadditiontothelegalandregulatoryframeworkforthebondmarketintheRepublicof

KoreahasbeentheintroductionoftheActonElectronicRegistrationofStock