Financial Supervisory Service Governor Lee Bok-hyun speaks during an investor relations event in Singapore Tuesday. He promised to abolish the decades-old foreign investor registration requirements this year. Photo courtesy of Financial Supervisory Service

Seoul administration going all out to draw FDI

The chief of South Korea’s financial watchdog has promised to abolish the foreign investor registration requirements during investor relations events to continue through May 12 in such Asian countries as Singapore, Indonesia, and Thailand.

The Financial Supervisory Service (FSS) strives to take the measure by the end of this September to attract more foreign investors to the country’s financial markets.

“By doing away with the foreign investor registration requirements, we vie to enhance foreign investor’s access to Korean capital markets,” FSS Governor Lee Bok-hyun said in an investor relations event in Singapore Tuesday.

“We will also try to improve the corporate governance structure by making the stewardship codes work properly.”

Since 1992 when the Korean government began allowing foreign investors to trade locally listed stocks, it has required foreign investors to register with the FSS.

Most other regulations, like the foreign investors’ stock holding limits, were discontinued. But the prior registration system has continued to exist for the past three decades.

A vast majority of advanced economies do not have such systems, which prompted foreign investors to come up with complaints due to necessary documents and other time-consuming procedures.

In addition to drawing foreign investments, the country also hopes to make its brokerage houses go global.

“With various policies, we vehemently support our financial companies’ efforts to tap into other countries,” Lee said.

As a part of such efforts, Korea’s top brokerage Mirae Asset Securities was accepted by SGX Wednesday as the Singaporean stock exchange’s new daily leverage certificate issuer.

Mirae Asset Securities has listed new DLCs comprising dollar-denominated ones. DLCs are high-risk financial products, which offer a leveraged return based on the performance of underlying indices.

It marked the first time for Korean securities companies to advance into Singapore’s exchange.