South Korea Financial Services Commission issues omnibus account guidelines for foreign investors and plans to widen eligibility

The South Korea Financial Services Commission (FSC) has published guidelines on the use of omnibus accounts to facilitate foreign investors’ trading in Korean stocks. The guidance is intended to remove uncertainty on how overseas financial investment businesses can open and manage omnibus accounts with domestic securities firms, covering account opening, shareholder rights, transaction reporting and internal controls aimed at preventing unfair trading and money laundering. The guidelines set out a step-by-step opening process involving an omnibus account agreement between the foreign and domestic securities firms, the opening of a custodial account with a domestic standing proxy, and creation of the omnibus account. The agreement is expected to include obligations to provide end-investor transaction records upon regulatory request, conduct customer due diligence on the actual holder of securities, and establish and maintain internal controls to prevent unfair trading. Shareholder rights are generally to be exercised in line with ordinary securities accounts, with split voting permitted where end-investors’ voting instructions differ, and the Korea Securities Depository allocating dividends in aggregate to the omnibus account holder for onward proportional payment to end-investors. Overseas firms must retain end-investor transaction records for 10 years and submit a monthly transaction record to the relevant domestic securities firm using a Financial Supervisory Service form by the 10th day of the following month, while domestic securities firms must prescreen foreign counterparties (including sanctions history, licensing status and control arrangements) and conduct ongoing inspections for customer due diligence compliance and effective internal controls. The guidance follows sandbox exemptions granted in April 2025, under which the first foreign-investor omnibus account was opened in August 2025 (Hana Securities and Emperor Securities), with Samsung Securities and Yuanta Securities also designated under the exemption framework in September 2025. An English version of the guidelines will also be made available. The FSC plans to complete rule changes to the regulation on financial investment businesses within December 2025 to abolish the current restriction that limits omnibus account eligibility to certain overseas securities businesses (subsidiaries or major shareholders of domestic financial investment businesses).