Yoon & Yang: Regulator proposes welcome changes to promote foreign investment in South Korea
27 February 2023
Yoon & Yang: Regulator proposes welcome changes to promote foreign investment in South Korea
On January 25, 2023, the Financial Services Commission of Korea (FSC) announced proposed measures to promote foreign investment in the Korean capital markets, lawyers at Yoon & Yang in Seoul announced.
Writing in a February 2023 Legal Update on its website, the firm wrote that the proposed changes reflect the discussions of an earlier meeting of the FSC’s Financial Regulatory Innovation Committee with the Financial Supervisor Service (FSS) and the Korea Financial Investment Association (being the Korean securities broker-dealers’ SRO).
“The reform measures are expected to be adopted in 2023 and the following years through amendments to the subordinate rules and regulations under the Financial Investment Service and Capital Markets Act (FSCMA) and other relevant laws,” the firm wrote.
The proposed changes consist largely of (a) lifting the requirement for foreign investors to register with the FSS prior to trading listed securities and requiring only the submission to the broker-dealer of an internationally recognized legal entity identifier for a corporate investor (LEI) or a passport number for a natural person, (b) eliminating certain restrictive reporting requirements to encourage the foreign investors’ use of omnibus accounts, (c) allowing ex-post notification for broader types of permitted OTC trades of listed securities (as opposed to the current requirement for ex-ante report) and (d) scheduled introduction in phases of mandatory English public disclosure regime to certain public companies listed on the Korea Exchange (KRX).
Further details are available from Yoon & Yang.
