South Korea has taken a series of measures to improve foreign accessibility to its equity and currency markets, but such access still remains limited, global index provider Morgan Stanley Capital International said Friday.
In its 2025 market accessibility review report, MSCI said the South Korean market has implemented a series of foreign exchange market reforms, such as the extension of trading hours and the allowance of foreign players to participate in the onshore forex market.
The global index provider, however, noted there is no offshore currency market and that constraints persist on the onshore currency market.
"Despite these reforms, the registration process continues to face operational hurdles. Moreover, the limited usage of omnibus accounts and over-the-counter transactions has constrained the impact of related regulatory initiatives," it said.
MSCI raised its rating on Korea's stock short selling to positive from negative as Seoul fully lifted its stock short selling ban, reintroduced in November 2023, in late March while taking new regulatory and technical measures aimed at enhancing oversight of the trading method.
The global index provider said it will continue to monitor developments to assess the stability of the regulations over time.
South Korea remained on MSCI's emerging market list last year as the country reimposed the ban on stock short selling.
Every year in June, MSCI renews its watch lists of emerging markets and developed markets based on the countries' economic development, size and liquidity of equity markets, and market accessibility for foreign investors. This year's lists are due out next week. (Yonhap)
