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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.