South Korea's financial authorities have revised the system to encrypt sensitive personal information in end-investor transaction records of foreign omnibus stock accounts. The move aims to improve foreign investors' access to the domestic stock market.
According to the financial investment industry on Wednesday, the financial authorities recently completed the revision of the foreign omnibus stock account guidelines. A foreign omnibus account is a system that allows foreign investors to trade Korean stocks through local brokerages or asset management firms without directly opening accounts at Korean securities firms.
Securities firms are required to report end-investor transaction records of foreign omnibus stock accounts to the Financial Supervisory Service (FSS) every quarter. Many foreign investors had raised concerns about the mandatory inclusion of sensitive personal information in these reports.
The financial authorities decided to maintain the transaction reporting obligation but replace the personal information provided with encrypted data. Previously, real names and identification numbers such as passport numbers were provided, but under the revised system, these will be replaced with encrypted investor identification numbers. However, if the financial authorities detect signs of suspicious trading tied to a specific investor identification number and request personal information, names and identification numbers must be provided.
The guideline revision is expected to improve foreign investors' access to the Korean stock market. Market participants anticipate that the system improvement will help revitalize the capital market by attracting more foreign investment.
