South Korea’s financial authorities are planning to permit foreign investors to directly trade domestic exchange-traded funds (ETFs), aiming to attract more overseas capital into Korean assets amidst the KOSPI’s remarkable surge. The KOSPI, one of the top-performing stock indexes globally, has surged by 82 percent this year, driven by robust performances of Samsung Electronics Co. and SK hynix Inc. amid the AI boom.
The Financial Services Commission (FSC) is working on amending investment business regulations to enable foreign investors to participate in local ETFs directly, with a prior notice expected to be issued next month, as per reports from Yonhap news agency. An ETF is an investment fund traded on a stock exchange that comprises a mix of stocks, commodities, and bonds, tracking an index.
Efforts to open up more avenues for foreign participation in the South Korean financial market are anticipated to boost demand for Korean assets, potentially bringing in more U.S. dollars into the country, stated a financial authority official. FSC Chairman Lee Eog-weon announced plans to revise regulations to allow offshore retail investors to trade ETFs through omnibus accounts, pending resolution of withholding tax issues, with implementation likely in the second half after brokerages update their trading systems.
South Korean stocks closed slightly higher on Friday for the second consecutive session, buoyed by optimism surrounding a potential diplomatic resolution between the United States and Iran, while the local currency weakened against the U.S. dollar.
