South Korea to scrap stocks registration rule for foreigners

The Financial Services Commission says details for improving the environment for foreign investment will be unveiled next week.

Currency dealers work as screens show South Korea's main stock market index, KOSPI (L), and the exchange rate between US dollar and South Korean won, Seoul, April 4, 2013 [File: Lee Jae-Won/Reuters]

South Korea will abolish a rule that forces foreign investors to register with authorities in order to trade Korean stocks amid a push to attract overseas investment, the country’s financial regulator has said.

“Instead, foreigners will be allowed to freely invest in our capital markets with internationally used identifications of passport or legal entity identifier [LEI],” Kim Joo-hyun, chairman of the Financial Services Commission (FSC), said on Thursday.

Kim said South Korea will also take steps to create a safe trading system for digital assets, including legalising offerings of security tokens.

The FSC plans to release more details on measures to improve foreign access to domestic capital markets on January 25 and those on security tokens early next month.

The regulatory agency flagged its intention to scrap the registration rule, introduced in 1992, last year, amid concerns that the South Korean stock market’s status as the only major market with such restrictions was holding back foreign investment.

Investment research company MSCI has excluded South Korea from its World Index of developed markets since 2014, citing issues including a lack of English-language information and complicated identification regulations for foreign investors.

The index, which covers large and mid-cap equity performance across 23 developed markets, is widely used by investors for deciding which countries to allocate assets to.

Source: Al Jazeera and news agencies