Korea Securities Depository (KSD) Auto Borrow Program

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Status: Best Practice Finalised, Last Updated: 26/04/2021

Question:
How should Korea Securities Depository (KSD) auto borrow SFTs be reported?

Best Practice:
Any members who subscribe to the KSD auto borrow program should refer to their legal agreements, reviewing their Know-Your-Client (KYC) process, and take an informed view as to who they are facing.

The KSD will not provide a breakdown of the beneficial owners and, as such, participant members are of the view that they should report such loans from the KSD as a Principal Lender. This is down to the fact that the KSD guarantees the borrower's performance and the ambiguity in reporting, (i.e. the barrier they have with the KSD not being in the position of disclosing their counterparty for settlement). (SFTR-340)