By Kang Gahui and Kim Hwaya
Listed stocks in paper form have made way for an electronic system in Korea.
Korea Securities Depository (KSD) said the electronic securities system that took effect on Sept. 16 requires all securities certificates of shares and bonds to be recorded on an electronic register for the purpose of making the market paperless.
The new system was adopted to improve the efficiency and transparency of domestic stock trading. Its launch follows the proclamation of a bill on the system's introduction in March 2016 and trial operations that lasted 3 1/2 years.
Investors can own and manage the selling of electronic securities through accounts opened at banks or securities companies. All listed securities and bonds must be issued and distributed electronically while those unlisted can be registered through application by the issuer.
Listed securities held by brokerages will be transferred into electronic form in a bundle, but undeposited securities and physical bonds will be invalidated.
KSD said the adoption of the new system will result in direct economic savings of an estimated KRW 180.9 billion per year and KRW 904.5 billion over the next five years through reduced management tasks for paper-based operations and lower related expenses.