In the past, foreign investors have to register with the authorities in order to trade South Korean stocks.
But now, the country’s financial regulator has moved to abolish the rule, a move that may open up the country to foreign investments.
Kim Joo-hyun, chairman of the Financial Services Commission (FSC), 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 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 February.
The registration rule introduced in 1992, has made South Korean stock market the only major market to hold back foreign investment.
The rule has also made investment research company, MSCI, to exclude South Korea from its World Index of developed markets since 2014.
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.
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