In the bond registration system, bondholders' rights are secured by entering their names, addresses, and details of rights in a legal register without issuing physical certificates.
Bonds eligible for registered issuance
- Bonds eligible for registered issue are National Housing Bonds (Type I, II, and III), municipal bonds, special bonds, financial bonds, corporate bonds, bonds issued by non-resident entity, certificates of deposit (CD), etc.
- Companies that want to issue bonds in registered form can use the bond registration system regardless of conditions of issuance, method of offering, and listing status.
- The method for registered issuance of bonds is divided into blanket registration and individual registration.
Procedures for registered issuance
The issuer designates KSD as the registrar and applies for participation in the online bond registration system. Once the applicant in the online system keys-in the conditions of issuance, details of underwriters, and certificates of payment for corporate bonds and submits them, KSD reviews them and completes the registered issuance.
Benefits of the Bond Registration System
This system simplifies the issuance procedures and eliminates the risk of physical bond certificates. Also, it saves costs associated with physical certificates such as certificate forms and overprinting costs, and stamp tax.
Bondholders can save the cost of managing physical bond certificates. Furthermore, the liquidity of bonds is increased because the bonds are deposited directly into the bondholder's account at a securities company through blanket deposit on the issuance date.