South Korea will scrap a rule forcing foreign investors to register with authorities to trade Korean stocks in a bid to attract foreign investment, the country’s financial regulator has said.
“Instead, foreigners are allowed to freely invest in our capital markets with internationally used IDs of passports or legal entities. [LEI]Kim Joo-hyun, chairman of the Financial Services Commission (FSC), said Thursday.
Kim said South Korea will also take steps to create a secure digital asset trading system, including legalizing security token offers.
The FSC plans to release more details on measures to improve foreign access to domestic capital markets on January 25 and on security tokens early next month.
The regulatory body announced its intention to scrap the registration rule, introduced last year in 1992, out of concern that the South Korean stock market’s status as the only major market with such restrictions would deter foreign investment.
Investment research firm MSCI has excluded South Korea from its World Index of Developed Markets since 2014, citing, among other things, a lack of English-language information and complicated identification requirements for foreign investors.
The index, which covers the stock performance of large and mid-capitalizations across 23 developed markets, is widely used by investors to decide which countries to allocate assets to.
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