KOREAN NET

The Financial Supervisory Service on April 2 announced that foreign financial investment companies can set up and use omnibus accounts and prepare related guidelines. iClickArt (Unauthorized reproduction and redistribution of this photo is prohibited under copyright law.)

By Xu Aiying

Direct foreign investment in domestic stocks will get easier thanks to the latest deregulation measures.

The Financial Supervisory Service (FSS) on April 2 announced plans to set related guidelines and allow the opening and use of omnibus accounts under the names of foreign financial investment companies.

Thus the FSS will allow foreign brokerages to open such accounts instead of only those that are affiliates or major shareholders of domestic financial investment companies.

Under the name of a financial investment company, an omnibus account allows multiple individual investors from abroad to place orders and settle domestic stock trades without the need to open individual Korean accounts. Trading or short selling stocks with foreign acquisition limits is prohibited.

Thus foreign investors not based in the country will be allowed to trade Korean stocks using omnibus accounts opened by brokerages based abroad.

The FSS plans to specify contractual relationships between domestic and foreign securities companies to ensure effective supervision targeting related overseas entities.

In addition, short selling on the domestic stock market was resumed on March 31 for the first time since in 17 months; it was banned in November 2023. Thus the market allowed the complete resumption of the practice for the first time in five years.

The FSS also decided to unify conditions like the short selling redemption period and collateral ratio for both individual and institutional investors.

xuaiy@korea.kr