Soonghee Lee In Korea, most securities, except for electronic short-term bonds, are issued in paper form and managed through a central deposit. As of January 2014, however, 31 OECD (Organisation for Economic Co-operation and Development) countries and China have adopted an electronic securities system, whereby securities are not issued in paper form and registration in an electronic registry is performed instead. Under this electronic securities system, the rights of securities holders are recognised, and the transfer, establishment of security over and exercise of rights are performed. The adoption of the electronic securities system allows cost savings compared with the issuance of securities in paper form, and it also removes risk factors resulting from the custody and management of securities in paper form. Further, through the foreclosure, in principle, of tax evasion, money laundering and other illicit transactions, the adoption of the electronic securities system is expected to result in the adoption of real-name securities transaction and holding systems; it is also expected to contribute considerably to investor protection and the formation of a fair trading order through prompt provision of information on the issuance and circulation of securities. As such, the National Assembly of Korea is discussing legislation for the adoption of an electronic securities system in order to improve capital market efficiency by facilitating the issuance and circulation of, and exercise of rights with respect to, electronic securities.
May 28 2014