[2020 National Audit] President Lee Myung-ho "Standardization of Non-Market Assets by First Half of Next Year"

[Asia Economy Reporter Oh Ju-yeon] Lee Myung-ho, President of the Korea Securities Depository, announced that they will standardize product codes for non-marketable assets by the first half of next year to enhance the transparency of private equity funds.

At the National Assembly's Finance and Economy Committee audit held on the 20th, in response to a question from Kim Han-jung, a member of the Democratic Party of Korea, asking, "In relation to the private equity fund fraud case, as a public institution, is the Depository creating a system to cross-check private equity funds of asset management companies?" Lee replied, "Yes," and made the statement.

President Lee said, "To increase transparency in the private equity fund market, we are coding non-marketable assets on FundNet, which is operated by the Depository, and preparing a system where market participants can mutually check each other," adding, "We have formed a task force with the financial investment industry and financial authorities to exchange opinions, and we plan to standardize non-marketable assets and create product codes by the first half of next year."

Based on this, they plan to build a 'Fund Asset Balance Reconciliation Support System' to support mutual reconciliation and verification between collective investment business operators (operation details) and trust business operators (trust details).

Recently, the Depository established the 'Private Equity Fund Transparency Enhancement Promotion Team' (department-level) and deployed nine fund specialists to directly visit and consult with about 40 related institutions in the asset management industry, including financial authorities, collective investment business operators, trust business operators, administrative management companies, and bond evaluation companies.

The Depository intends to transparently manage private equity fund assets based on FundNet, the infrastructure for asset management business. As a short-term project, they will build a fund non-marketable asset standard code management system to support asset detail matching among participants, accept operation instructions for non-marketable assets, and establish a fund asset balance reconciliation support system that compares and verifies asset details using the standard codes for non-marketable assets managed within this system.