Recommendation 1 Recommendation 2 Recommendation 3 Recommendation 4

Recommendation 5 Recommendation 6 Recommendation 7 Recommendation 8

Market selection

Recommendation 1

Securities Systems* have a primary responsibility to their users** and other stakeholders. They must provide effective low cost processing. Services should be priced equitably.

* Securities Systems = depositories, settlement and clearing systems
** Users = customers of the securities system, and all other parties to whom the securities system owes a duty of care

1.	Is the board that governs the depository answerable to its users?	Yes.
2.	Does any single organisation, or sector (e.g. brokers, custodians, Stock Exchange) have a large voting position at the board of the depository?	Yes. The Korea Stock Exchange is the largest stockholder in KSD, with a stake of 70.4% as of December 31, 2000.
3.	Is there cross subsidisation of products (e.g. international services subsidised by local ones or transaction costs subsidised by asset servicing charges)?	Yes. Custody costs are partly subsidized by transaction charges.
4.	What process is in place at the depository to ensure that it meets the needs of all its stakeholders (e.g. institutions, broker dealers, retail investors, issuers)?	Non-standing directors from the industry (KSE, broker, dealers, etc.) constitute the board of the depository.
5.	What is the communications strategy of the depository to its stakeholders and how is this run?	Stakeholders should receive prior notice before any changes are implemented (e.g. amendments to the regulations, introducing new businesses, etc.). Notification can be through newspapers, mail, internet, etc.