Rules eased for foreign investors to buy stocksKorea’s stock exchange joined regulators in loosening trading rules for overseas investors, this time in the country’s derivatives market.
The Korea Exchange said Wednesday that offshore investors will be able to use overseas brokers to access Korea, a change from existing rules.
The introduction of so-called omnibus accounts will end the requirement that overseas investors must have an account with local firms in Korea.
The measures are aimed at increasing participation in Korea’s derivatives market.
Global funds have pulled $5 billion out of Korean stocks in the past 12 months, the biggest sell-off among eight Asian nations tracked by Bloomberg.
The Korea Exchange said in its statement that it hopes the changes will help its markets meet global standards and establish sustainable growth through new projects.
The Financial Services Commission said on Jan. 31 that it would amend stock market rules and oversee an overhaul of electronic trading systems in April. It said omnibus accounts, which will replace an unpopular rule that requires offshore money managers to trade shares through a separate account for each of their funds, will be introduced on a trial basis from May.
Under the changes announced by KRX on Wednesday, foreign participants will be judged based on their assets, credit-worthiness and risk-management systems. Limits to the value of foreign investments and which products offshore investors can trade will be judged on a case-by-case basis, the exchange said. Bloomberg