South Korea Will No Longer Require Foreign Investors to Register Their Stock Holdings

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According to the nation’s financial authority, South Korea is going to do away with a restriction that requires foreign investors to register with the authorities in order to trade Korean stocks. This is part of an effort to encourage investment from outside the country.

According to Kim Joo-hyun, head of the Financial Services Commission (FSC), who said on Thursday, “instead, foreigners would be able to freely trade in our capital markets using globally used identifications of passport or legal entity identifier [LEI].”

Kim has said that South Korea would also take actions to establish a secure trading system for digital assets. One of these actions will be the legalization of the issuing of security tokens.

On January 25, the FSC aims to announce further information on steps to promote foreign access to domestic capital markets, and at the beginning of February, the FSC plans to release additional details on security tokens.

The South Korean stock market is the only major market that has such limitations, which is why the regulatory agency announced its plan to eliminate the registration regulation, which has been in place since 1992. There were worries that this was discouraging foreign investment in the market.

Since 2014, the investment research firm MSCI has not included South Korea in its World Index of developed markets. The company cites a number of issues as the reason for this decision, including a lack of information available in English and complicated identification regulations for international investors.

Investors often consult this index when making decisions about which nations to allot their assets to since it measures the performance of big and mid-cap stock markets across 23 developed economies.

 

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