Foreign investors can buy stocks more easily
By Kim Jae-won
Foreign investors seeking to invest in Seoul stocks will be exempt from requirements calling for them to submit written pledges allowing domestic brokerage houses to provide information about stock transactions to foreign securities firms.
The financial regulator scrapped the regulation, seeking to draw more investments from global investors.
The Financial Services Commission (FSC) said Thursday that foreign investors now can buy stocks listed on the local markets with no submission of such documents. Previously, they were obliged to submit the document to trade local stocks.
“We decided to remove the regulation because it was disturbing foreign investors,” said an FSC official. “We wish it will boost investments to local stock markets from foreign investors.”
The deregulation came amid foreign investors are lowering their portions in the local stock market. Foreign investors accounted for 29.22 percent of local stock markets by market capitalization in July, the lowest level in six years, according to data from the Korea Exchange.
Foreign investors said that the regulator needs to pressure local listed companies to provide their information in English to foreign investors, if they want to draw more investments from them.
Pheim Asset Management, a Singapore-based firm with $300 million of assets under management, said that its fund managers often have difficulties in investing in Korean companies as there are no documents available in English. Pheim said they have no choice but to call local securities firms to ask for information on listed companies when they find no data in English.
Deregulation was the subject of 2,845 complaints from 227 financial institutions which the regulator has collected since April. The regulator has dispatched its market communication teams to financial firms to listen to them.
It is one of FSC Chairman Yim Jong-yong’s reformation programs. Yim has pushed for reforming the financial industry since his inauguration in March.