SOUTH Korea will allow foreign investors to tap a wider pool of banks for the best won quotes to be used in their stocks and bond transactions to lure inflows.
It will permit temporary won overdrafts for global investors to settle stock and bond trades, reducing the burden of potential settlement failure resulting from delayed foreign exchange procedures, according to a finance ministry statement on Wednesday (Feb 21).
Regulations will be changed in the first quarter so as to reduce foreign exchange costs for global investors, it said.
“We’d like to reduce the misunderstanding that it’s difficult to get good quotes for the won, or that it’s hard to sustain the value of won assets that the investor is holding,” Kim Shinyoung, head of the FX market team at the Bank of Korea, said at a briefing.
Korean authorities have bolstered efforts in recent years to court foreign investors and improve market access, as the country also makes a push to get its stocks and bonds added to global developed market indexes.
The government has abolished the requirement for foreign investors to pre-register before investing in Korean equities, and made it a mandate for local companies to post English filings.
It also let some foreign banks participate in the local interbank market, and plans to extend trading hours for the onshore won starting July. BLOOMBERG
