Omnibus Account

The Financial Services Commission announced on January 31 that the omnibus accounts will become available in May, 2015.
The Financial Services Commission announced on January 31 that the omnibus accounts will become available in May, 2015.

 

Omnibus accounts for foreign investors are to be allowed in Korea so that foreign securities companies and global asset management companies can handle multiple investors’ transactions in an integrated way. This measure, which is the first revision of the foreign investor registration system of Korea since the opening of the Korean stock market 24 years ago, is for the purpose of the stock exchange’s inclusion in the MSCI World Index.The Financial Services Commission announced on January 31 that the omnibus accounts will become available in May this year for the convenience of foreign individual and institutional investors and global asset management firms investing in the Korean stock market. The establishment of rules and systems is scheduled to be completed by that month before the accounts are tested by some organizations during the rest of this year and fully allowed next year.

Under the circumstances, global asset management firms can handle stock orders, transactions and settlements for all funds with a single account instead of having to open different accounts for respective funds. In addition, foreign individual investors, corporate investors and pension funds can buy and sell Korean stocks via the omnibus accounts of HSBC, Merrill Lynch and the like without opening any domestic account.

The Korean government is expecting that this will result in an increase in investment in the domestic stock market by facilitating foreign financial institutions’ attraction of investors. As of the end of last year, a total of 10,000 or so foreign individual investors were registered in the stock exchange to account for 25% of the total registered foreign investors but their stockholdings stood at approximately 1.4 trillion won, 0.16% of the total amount.

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