Foreign corporations can now simplify the process of opening investment accounts with domestic financial institutions by submitting just a single LEI issuance confirmation document instead of multiple identity verification documents.
The Korea Securities Depository announced on July 16 that it began offering the 'LEI Issuance Confirmation Document Service' in April. This document certifies the issuance status of the Legal Entity Identifier (LEI) held by foreign corporations, including the corporate name, country of establishment, and level of information verification.
The LEI is a 20-character international standard identifier assigned to distinguish entities participating in financial transactions. It was introduced to address issues during the global financial crisis when different identifiers used by financial institutions made it difficult to quickly assess the parties involved in derivative transactions and the associated risks.
Previously, the government abolished the foreign investor registration system in December 2023 to enhance access for foreign investors to the domestic capital market. Individuals can now open accounts using their passport numbers, while corporations can do so using their LEIs. However, foreign corporations were required to translate and notarize their corporate registration documents if they did not possess physical identity verification documents despite having an LEI.
To alleviate this burden, the Korea Securities Depository secured the authority to issue confirmation documents after discussions with the Global Legal Entity Identifier Foundation (GLEIF). In collaboration with the Korea Federation of Banks, it revised the guidelines for financial real-name transactions to include the LEI issuance confirmation document as an official identity verification document for foreign investors. As a result, holders of 'Level 1' LEIs, which have fully verified corporate information, can now complete identity verification with just the issuance confirmation document, without the need for additional translation or notarization. Approximately 88% of LEIs worldwide fall under Level 1.
The Korea Securities Depository is the only LEI issuing authority globally that can issue confirmation documents for LEIs issued by other countries and institutions. Users can apply for and print the confirmation document in PDF format through the Korea Securities Depository's LEI management system, 'LEI-K.' The document features anti-tampering barcodes and electronic signatures. To support the establishment of this system, the issuance fee will be temporarily waived.
According to the Korea Securities Depository, a total of 200 confirmation documents were issued by the end of April since the service began. Of these, 137 were for funds, 59 for general corporations, and 4 for government agencies, including the International Monetary Fund (IMF) and the New Jersey State Pension Fund.
Currently, the Korea Securities Depository provides LEI services to nine English-speaking countries, including South Korea, the United States, the United Kingdom, and Singapore. As of the end of March this year, a total of 2,008 LEIs are being issued and managed.
* This article has been translated by AI.
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