S. Korea moves to expand stock market access for foreign investors

변덕근 / 2023-12-13 12:00:13

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▲ The logo of the Financial Supervisory Service (PHOTO NOT FOR SALE) (Yonhap)

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S. Korea moves to expand stock market access for foreign investors

SEOUL, Dec. 13 (Yonhap) -- Foreign investors will be allowed to begin purchasing South Korean stocks without prior authorization starting this week, the financial regulator said Wednesday, as part of efforts to allow easier access to the local market for foreigners.

Currently, foreigners are required to register with the Financial Supervisory Service (FSS) before investing in the local stock market, according to the FSS.

"With the implementation of the (revised) Capital Market Act tomorrow (Thursday) repealing the pre-registration system for foreign investors, foreign investors can invest in local stocks without any prior registration," it said in a press release.

Previously, foreign investors had been given investor identification numbers upon registration, but they will be allowed to use their legal entity identifier or passport numbers instead for stock investment, according to the FSS.

Foreign securities firms that manage omnibus accounts to invest in the domestic market will also be allowed to report their transactions once a month, instead of following each transaction as currently required.

An omnibus account refers to an account that holds securities for multiple clients, often managed by a broker to help simplify the accounting process and reduce costs.

The moves are part of ongoing efforts to bring the local stock market up to speed with global standards.

Under such efforts, listed firms with 10 trillion won (US$7.62 billion) or more in assets will also be required to make regulatory disclosures in English from the start of next year if 5 percent or more of their shares are owned by foreigners, according to the FSS.

Companies with more than 2 trillion won but less than 10 trillion won in assets will be required to do the same when and if 30 percent or more of their stakes are owned by foreign investors.

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