Koscom strengthens ties with brokerages to boost security token platforms
As the South Korean capital market eyes the burgeoning potential of security token offering (STO) businesses, Koscom, a financial IT company, is increasingly coming into focus among securities firms for its dedicated STO platform. With four securities companies already in partnership, Koscom is actively seeking to expand its collaboration network further. Koscom is a technology subsidiary of Korea Exchange, the country’s only securities exchange operator.
More partnerships with securities firms
According to its press release published a few weeks ago, Koscom inked a memorandum of understanding (MOU) with Yuanta Securities Korea, the South Korean branch of the Taiwanese retail broker. Through the partnership, the two entities pledged to collaborate on developing blockchain platforms and discovering new STO projects.
The MOU between Koscom and Yuanta is the fourth STO-related partnership Koscom has inked with a securities company. Koscom's other three brokerage partners are Kiwoom Securities, Daishin Securities and IBK Securities.
With over four decades of experience in managing ledgers for brokerages, Koscom is highly skilled in constructing technical infrastructure for the capital market. As the operator of its own blockchain platform, this fintech company has been developing blockchain technology and acquiring relevant expertise.
Security token issuance and distribution
The necessity for blockchain-based STO platforms provided by companies like Koscom for brokerages stems from regulations set forth by the Korean financial authority. The Financial Services Commission (FSC) mandates that the issuance and distribution of security tokens must be carried out by separate entities. This regulatory framework necessitates a platform that enables securities firms to connect and interact with each other.
Koscom offers a joint STO platform designed to streamline transactions between brokerages, improving cost-effectiveness. In light of this, the financial IT company concentrates on developing such platforms with the aim of laying a solid foundation for the emerging STO market. According to local media outlet Etnews, Koscom has set its sights on completing the platform development within the first quarter, with plans to address additional requirements from brokerages subsequently.
Striving to expand its network of partnerships to include companies both large and small, Koscom recognizes that a more diverse array of participating firms can enhance the efficiency of token issuance and distribution, which would in turn accelerate the adoption of STOs. Koscom’s strategy offers its partners an opportunity to test its STO infrastructure before the relevant legislation governing the management of security tokens is passed at the National Assembly.
Regarding this development, Kim Sung-hwan, Head of the Digital Business Division at Koscom, said, “Koscom’s joint STO platform is emerging as an alternative method for brokerage firms to venture into the security token business. Factors such as costs and workforce requirements have made it difficult for many firms to proceed independently.” He added, “We will provide full technical support for our platform users, allowing them to focus on identifying reliable underlying assets for security tokens.”
