OTC Derivatives Collateral Management Service
KSD, as a fair third party, manages the collateral for secured transactions that are executed under individual contracts between trade counterparties in the non-organized market.
Eligible asset for collateral and service users
- Eligible assets for collateral
- Cash and Bank Deposits: KRW, USD, EUR, JPY, CNY
- Equities: Equities listed on KRX
- Bonds: Bonds which pricing data can be obtained from asset pricing companies
- Service users
- KSD participants who eligible to open a depository account
Collateral management service procedure
- Collateral transaction management
Collateral management conditions of trade counterparties are managed through KSD's SAFE+ system.
- Collateral management service
Margin calls can be made to adjust the size of the transaction in case of fluctuations in the collateral securities' value through evaluation and mark-to-market of collateral securities.
- Mark-to-market service
KSD notifies concerned parties the result of comparing the risk exposure in underlying transactions with the value of collateral on a day-to-day basis.
- Rights management
KSD processes rights such as interest and dividends payments from collateral securities automatically through KSD's right management system.
Benefits of KSD's OTC collateral management service
- KSD managed collateral fairly and unbiasedly as an uninterested third party.
- KSD provides real-time and transparent collateral management via the participant account book, a legal ledger.
- KSD offers efficient risk management through daily mark-to-market valuation of collateral.
- KSD reduces transaction operational burden by automatically processing rights such as interest and dividends from collateral securities.