Shinhan Bank and Korea Securities Depository Sign Business Agreement for 'Cash Collateral Trust Custody and Management Project'

[Asia Economy Reporter Eunju Lee] Shinhan Bank announced on the 5th that it has signed a business agreement with the Korea Securities Depository for the cash collateral trust custody and management business.

Based on this business agreement, the two companies plan to promote a project to conclude trust contracts and establish systems to custody and manage cash collateral in a trust method for non-cleared over-the-counter derivative transactions. Through this, participating financial institutions will be able to use not only securities but also cash as collateral.

The two companies will develop systems to smoothly utilize cash collateral, which is qualified collateral in addition to existing securities collateral, and plan to provide full-scale cash collateral custody services starting from March 2023.

A Shinhan Bank official said, "As we participate in this project that will present a new paradigm for the collateral system in Korea, we will do our best to establish a stable settlement of the collateral market and a win-win system through collaboration with the Korea Securities Depository and market participant financial institutions."