Foreign accessibility to equity, currency markets remains issue for Korea: MSCI

Korea has taken a series of measures to improve foreign accessibility to its equity and currency markets, but underlying accessibility issues remain, the global index provider Morgan Stanley Capital International (MSCI) said on Friday.

"In Korea, authorities have continued implementing the reform agenda introduced in prior years, with additional measures announced across several areas. However, underlying accessibility issues remain unresolved," the MSCI said in its global market accessibility review report.

For instance, the country has moved to implement measures, including launching a 24-hour foreign currency market later this year, to align its foreign exchange framework with global practice, but a fully deliverable offshore currency market is still not yet available, it pointed out.

Korea also lifted a short selling ban in early 2025 and implemented a new naked short selling detection system.

"As the framework has been put into use, however, friction has emerged in practice, and refinements to operational processes and infrastructure are ongoing," the MSCI said.

But the MSCI said derivative products linked to Korean indexes have been launched on international exchanges, broadening the offering of investment instruments available to international investors.

Early this year, Korea announced a comprehensive road map aimed at securing its inclusion in the developed market index of the MSCI, including plans to operate the country's foreign exchange market on a 24-hour basis.

The Ministry of Finance and Economy said that if a series of measures is implemented effectively, Korea could be placed on MSCI's watch list in the annual market classification review later this year, with a decision on its inclusion in the developed market index possible in June 2027.

Yonhap