MSCI says South Korea market upgrade depends on regulatory changes in practice
South Korea's push to secure developed-market status from MSCI still hinges on whether recent regulatory reforms are implemented effectively. The review matters for the country's effort to attract broader global investment after the government introduced market and tax measures since June 2025.
Highlights
- MSCI Chairman Henry Fernandez says South Korea's market upgrade to developed status depends on regulatory reforms proving effective in practice.
- President Lee Jae Myung's administration has implemented market reforms and tax measures since June 2025 to boost the domestic stock market.
- South Korea will open its currency market in July for 24-hour trading and may introduce further steps to address local stock valuation discounts.
MSCI sets implementation test for upgrade
As reported by Reuters, MSCI Chairman and CEO Henry Fernandez says the index provider sees progress in South Korea's rules and regulations but still needs to see those changes work in practice.Speaking at a conference in Seoul on Friday, Fernandez says coordination is needed to push the process to the finish line and accelerate the country's case for an upgrade from emerging-market to developed-market status.
Reforms target foreign investor access
Winning the upgrade remains one of President Lee Jae Myung's major policy pledges. His government has rolled out market reforms and tax measures to support the domestic stock market since he took office in June 2025.South Korea also opens its currency market in July for 24-hour trading in a bid to strengthen its case. Regulators are also considering further steps to narrow the discount in local stock valuations versus global peers, including expanding English-language company filings, encouraging higher dividends and naming companies with extremely low price-to-book ratios.
In our earlier article on the Philippines’ sovereign bond market reforms and planned index inclusion, we explained how changes like a new pricing convention and benchmark entry can improve comparability, liquidity, and foreign participation. We also noted that these steps alone don’t guarantee broader economic gains, which still depend on factors like fiscal credibility, investor protection, and deeper capital markets that help companies raise long-term funding.
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