Settlement Systems of East Asian Economies Commissioned by Ministry of Finance Japan March 2004 Institute for International Monetary Affairs Table of Contents Foreword.........................................................................................................................................1 List of Abbreviation ....................................................................................................................3 Chapter 1 Payment Systems of Hong Kong and Singapore, and Cross-border Linkages.........8 1. Payment Systems of Hong Kong....................................................................................................8 (1) Payment Systems...............................................................................................................8 i. HK-Dollar RTGS System ................................................................................................8 ii. USD RTGS System..........................................................................................................8 iii. Euro RTGS System........................................................................................................10 iv. Plans for a Yen RTGS System.......................................................................................11 v. Plans for Linking PvP Settlement Systems....................................................................11 (2) Securities Settlement Systems .........................................................................................12 i. Central Moneymarkets Unit...........................................................................................12 ii. Central Clearing and Settlement System .......................................................................13 (3) Enhancement of Linkages with China .............................................................................14 i. Closer Economic Relationship with China ....................................................................14 ii. Promotion of Settlement Infrastructure Linkage with China.........................................16 (4) Cross-border Linkage with International CSDs...............................................................17 i. Bilateral Linkages with International CSDs ..................................................................17 ii. Bilateral Linkages with Regional CSDs ........................................................................17 iii. Relationships with Global Custodians...........................................................................18 iv. Comparison with Singapore...........................................................................................18 2. Payment Systems of Singapore ....................................................................................................19 (1) Payment Systems.............................................................................................................19 i. Payment System Types..................................................................................................19 ii. Singapore-dollar RTGS System.....................................................................................20 iii. PvP Settlement and CLS System ...................................................................................20 iv. Payment and Settelment Systems (Finality and Netting) Act 2002...............................21 (2) Securities Settlement System...........................................................................................21 i. SGS Settlement System .................................................................................................21 ii. Depository for Singapore’s Securities Markets .............................................................22 iii. Settlement System for Private and Public Corporation Bonds ......................................22 iv. Stock Settlement System ...............................................................................................22 v. Addressing STP .............................................................................................................23 (3) Settlement System’s Cross-border Linkage.....................................................................23 i. Plans for Retail Settlement Linkage ..............................................................................23 ii. Cross-border Linkages of CSD and Stock Exchanges...................................................24 Chapter 2 Payment Systems of China ..........................................................................................25 1. Payment Systems.......................................................................................................................25 (1) Electronic Interbank System............................................................................................25 i. Outline ...........................................................................................................................25 ii. Payment Structure..........................................................................................................25 iii. EIS Revaluation and Pending Issues..............................................................................26 (2) China National Advanced Payment System ....................................................................26 i. Developmet History.......................................................................................................26 ii. Outline ...........................................................................................................................27 iii. Payment Structure..........................................................................................................27 iv. Future Schedule .............................................................................................................29 v. Valuation and Issues to Be Resolved.............................................................................29 (3) Local Clearing House System .........................................................................................30 i. Outline ...........................................................................................................................30 ii. Payment Structure..........................................................................................................30 iii. Valuation and Issues to be Resolved .............................................................................31 (4) Commercial Banks’ Intra-office Payment Systems.........................................................31 (5) National Interbank System ............................................................................................31 2. Securities Settlement Systems...................................................................................................32 (1) Outline .............................................................................................................................32 (2) Stock Exchange Settlement Systems ...............................................................................32 i. Outline ...........................................................................................................................32 ii. Trading System Outline.................................................................................................34 iii. Outline of SD&C ...........................................................................................................35 iv. Clearing and Settlement System ....................................................................................35 (3) Bond Market ....................................................................................................................37 i. Outline ...........................................................................................................................37 ii. Outline of Trading System.............................................................................................41 iii. Outline of the CDC........................................................................................................41 iv. Settlement System .........................................................................................................42 Chapter 3 Payment Systems of Korea ..........................................................................................43 1. Payment Systems.......................................................................................................................43 (1) Retail Payment Systems ..................................................................................................43 (2) BOK-Wire（The Bank of Korea Financial Wire Network） .........................................45 i. Outline ...........................................................................................................................45 ii. Operation and Settlement Hours....................................................................................45 iii. Fees................................................................................................................................45 iv. Queue and Overdrafts ....................................................................................................45 (3) Current Issues and Initiatives for Further Development..................................................46 2. Securities Settlement Systems...................................................................................................47