South Korea’s cabinet approved dedicated covered bond legislation today (Tuesday), which is due to come into effect next Tuesday, 15 April, according to a spokesperson at the Financial Services Commission, which initially tabled legislation for the asset class.

National Assembly, Seoul

The approval of the law by the country’s main executive body comes after the Act on Issuance of Covered Bonds was passed by the country’s parliament in December, around a year after the Financial Services Commission, the South Korean financial regulator, introduced a draft law.

A spokesperson at the regulator told The Covered Bond Report that the law was passed without debate in the cabinet and mentioned that the Financial Supervisory Service is responsible for drafting detailed secondary regulations.

There has already been South Korean covered bond issuance, but this has either been on a structured basis, in the case of issuance by Kookmin Bank, or, in the case of issuance by Korea Housing Finance Corporation, on the basis of legislation specific to that institution. South Korea is the first Asian country to have dedicated general covered bond legislation.