SEOUL, June 5 (Korea Bizwire) — Foreign investors will be allowed to buy South Korean stocks and bonds without prior registration starting December, the state financial regulator said Monday.
Earlier in the day, the Cabinet approved a revision of an enforcement decree to abolish the 30-year-old foreign investor registration system that requires foreigners to register with the authorities to trade local stocks, according to the Financial Services Commission (FSC).
With the revision, foreigners will be allowed to open an account with securities firms, using their passport numbers or legal entity identifier for companies adopted across the Group of 20 nations in 2011, from Dec. 14.
Those who already have a registration ID will be able to keep using the ID, the FSC added.
The financial regulator said the revised rule is expected to help improve foreigners’ access to the South Korean stock market and attract more investment.
The registration system was established in 1992 to control the foreign shares of companies listed on the main KOSPI and secondary KOSDAQ bourses.
The system has sparked criticism for blocking foreign investment in local stocks and being a deviation from the global standard. Major financial markets, including the United States and Japan, do not have such a system.