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Separate Deposit System

We protect our valuable customers and their assets.

In accordance with the Financial Investment Services and Capital Markets Act, full amounts of investors' deposits are re-deposited with and separately managed by the KSFC, in order to protect investors against possible bankruptcies of investment dealers or brokers.

Purpose of Introduction

To protect securities and derivatives investors from the possible bankruptcies of investment dealers and brokers by separately managing customers' deposits in accordance with the Financial Investment Services and Capital Markets Act.

Types of Investors' Deposits

Types of Investors' Deposits
Investors' Deposits for Securities Trading Funds deposited with an investment dealer or broker by a customer for purchasing securities
Investors' Deposits for Derivatives Trading Funds deposited with an investment dealer or broker by a customer for trading derivatives on the Korea Exchange

Depositing Method

  • Investment dealers or brokers must specify that the funds they are depositing are their customers' assets
  • Investment dealers or brokers must choose between a deposit account or a trust account for their investors' deposits
  • Investment dealers must calculate the amount of investors' deposits that must be re-deposited with the KSFC every business day and re-deposit the amount accordingly on the following business day (for deposits from beneficiaries, they are re-deposited on the same business day)

Safe Management Tool

Safe Management Tool
  1. 1.Investors' deposits are safely protected since they are fully re-deposited with and separately managed by KSFC, an excellent financial institution with a AAA credit rating, in accordance with the Financial Investment Services and Capital Markets Act.
  2. 2.The management of customers' assets deposited with KSFC is strictly limited to safe assets such as government or public bonds pursuant to relevant laws and regulations.

History

  • 2000's
    Jul. 2009 Launched the special money trust business to support the money transfer business of financial investment companies
    Dec. 2002 KSFC permitted to manage investors' deposits in trust accounts (securities/futures firms may choose between a deposit account or a trust account)
    Apr. 2001 Mandatory separate depositing of customers' margin placed at securities firms with a net capital ratio of less than 120%
    Mar. 2001 Discount brokers permitted to separately deposit investors' deposits with the KSFC
  • 1990's
    Jul. 1999 Increased the mandatory re-depositing ratio: to 75% on Jul. 6; to 100% on Jul. 21
    May 1999 Mandatory depositing of 50% of investors' deposits
    May 1998 Mandatory depositing according to securities firms' net capital ratio (30%~100%)
    May 1996 Mandatory re-depositing of investors' deposits for futures and options trading (15% of customers' margin)
  • 1980's
    Sep. 1983 Mandatory partial re-depositing of investors' deposits (10%~30%) (implemented until Apr. 1998 / the deposit ratio changed according to the market situation)
  • 1970's
    May 1979 Voluntary re-depositing of investors' deposits
    Apr. 1978 Mandatory re-depositing of full amounts of investors' deposits with the KSFC