Foreigners, 'Buying KOSPI' Has Its Reasons... Effect of Abolishing Foreign Investor Registration System
Number of Accounts Opened Using LEI and Passports Reaches 1,432
Contributing to Enhanced Accessibility to Domestic Stock Market
Since the abolition of the foreign investor registration system in December last year, accessibility for foreign investors to the domestic stock market has significantly improved over the past six months.
The Financial Services Commission announced on the 21st that during the approximately six-month period following the abolition of the foreign investor registration system (December 15, 2023 ? June 12, 2024), there were 1,432 account openings by foreigners using LEI (Legal Entity Identifier) and passports.
After the abolition of the foreign investor registration system, financial companies have been able to open accounts and allow investments in domestically listed securities by foreigners using LEI and passport numbers as identification methods without any separate prior registration procedures.
Specifically, of the 1,432 accounts opened by foreign investors, 1,216 were corporate accounts and 216 were individual accounts. The number of account openings has surged monthly from 27 in December last year. In particular, since March this year, the number of account openings has reached 300 to 400 per month.
The Financial Services Commission explained that considering the average monthly issuance of 105 IRCs in 2023, the abolition of the foreign registration procedure appears to have contributed to enhancing foreign investors' accessibility to the capital market.
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Kim So-young, Vice Chairman of the Financial Services Commission, stated, "Since the abolition of the foreign investor registration system, account openings have become more convenient, leading to a significant increase in foreign investors opening accounts," and added, "This is considered one of the factors contributing to the recent increase in foreign capital inflows into the domestic stock market."
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