KSD Enhances Asset-Backed Securities Integrated Information System

The Korea Securities Depository announced on January 12, 2024, that it has expanded and opened the Securitization Securities Integrated Information System in alignment with the enforcement date of the revised Asset Securitization Act.

The integrated information system consists of the securitization securities information collection system (e-SAFE) and the information disclosure system (SEIBro), enabling investors to access issuance, disclosure, trading, and credit rating information of securitization securities through a single platform.

Financial authorities will use the system to monitor the market, including compliance with the newly introduced 5% mandatory holding requirement for securitized asset holders under the revised law.

Initially launched in January 2021 to support financial authorities’ efforts to strengthen risk management in the asset securitization market, the system was later upgraded due to limitations in collecting all disclosure information during its initial phase.

The upgrade was prompted by the passage of the revised Asset Securitization Act in the National Assembly in July 2023, which provided the opportunity to reorganize the existing information collection and management system and develop enhancements to accommodate additional securitization data.

The Korea Securities Depository first announced the completion of the Securitization Securities Integrated Information System on December 30, 2020, with plans to officially launch services via the Securities Information Portal (SEIBro) starting January 4, 2021.

At the time of its initial launch, the system aimed to address the fragmentation of securitized securities information, which had previously been scattered across multiple sources due to the complex issuance structure compared to general bonds, and bills.

This fragmentation had led to significant discrepancies in information quality and level across different media, limiting investor access, particularly for non-registered securitizations where basic disclosure was insufficient and relied on arbitrary information provision.

To address these challenges, the Financial Services Commission established a ‘Comprehensive Improvement Plan for the Asset Securitization System’ in May 2020, prompting the Korea Securities Depository to build an integrated system to strengthen information provision.

The system was designed to create a framework where issuers (such as trustees), the Korea Financial Investment Association, and credit rating agencies could submit relevant information to the Korea Securities Depository for consolidation and dissemination.

general investors and other stakeholders can now access information and statistics related to securitized securities through the ‘Korea Securities Depository Securities Information Portal’.

The Korea Securities Depository also announced on January 17, 2024, the expansion and stable operation of an integrated information system for floating securities, further enhancing transparency in the asset liquidity market.

This system includes an information collection system (e-SAFE) and a disclosure system (SEIBro), allowing investors to conveniently check issuance, disclosure, sale, and credit rating information of floating securities.

Financial authorities can monitor market developments, including risk holding obligations (5%), through this platform, which was introduced following amendments to the ‘Act on Asset Liquidation’ in January 2023 to mandate disclosure of floating securities information.

The initiative aims to boost the asset liquidity market and increase transparency, with 49 companies, including securities firms, participating in related events for the first time in 18 months.