In the future, foreigners are expected to be able to easily invest in domestic stocks through local securities firms.
On the 2nd, the Financial Supervisory Service (FSS) announced that it will allow the opening and use of integrated accounts under the name of foreign financial investment firms and will also prepare related guidelines.
To promote foreign investment in domestic stocks, the financial authorities introduced the "Foreigners' Stock Integrated Account" system in 2017 and have continuously improved the system, such as easing reporting obligations in June 2023. However, there has been no performance in the foreign stock integrated account (hereinafter referred to as the integrated account) to date.
The FSS explained, "Currently, the requirements for opening an integrated account are somewhat strict under the regulations, and there are areas for improvement such as preparing guidelines," adding, "We have established a direction for improving the foreign stock integrated account system by reflecting the opinions of the entire industry, including overseas financial investment firms and domestic securities companies."
The FSS plans to ease the requirements for opening foreign stock integrated accounts and prepare related guidelines to facilitate foreign stock investment more smoothly.
Previously, only overseas securities firms affiliated with or major shareholders of domestic financial investment firms could open integrated accounts, but going forward, overseas securities firms will also be allowed to open integrated accounts. Additionally, to ensure practical supervisory effectiveness over overseas securities firms, contractual relationships between domestic and overseas securities firms will be specified.
Along with this, the FSS will continue consultations with the Korea Financial Investment Association and others to prepare guidelines and Q&A that include the reporting system of domestic securities firms providing integrated account services, customer verification obligations, and business procedures, so that foreign investors do not experience inconvenience while using integrated accounts.
The Financial Services Commission has designated this as an innovative financial service and granted regulatory exemptions. Through the pilot operation of the newly designated innovative financial service, the overall operation status of the improved integrated account system will be identified. Additional necessary improvements to the integrated account system will be reflected, and institutionalization such as regulation amendments will be pursued promptly.
The FSS stated, "Non-resident foreigners will be provided with investment convenience, such as being able to place integrated orders and settlements through local securities firms where they opened integrated accounts without separately opening accounts with Korean securities firms," and added, "This will increase accessibility for non-resident foreign investors to domestic stocks, contributing to the advancement of the capital market by diversifying investment participants and promoting the inflow of new funds."
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