The Financial Services Commission announced the availability of guidelines on the use of omnibus account for foreign investors on November 27.
Background
With the introduction of omnibus account in 2017 and the abolishment of the T+2 transactions reporting duty for omnibus account holders in 2023, the FSC has been making continuous efforts to improve the convenience of transactions for foreign investors. However, in various communications with overseas investors, it has been pointed out that the current eligibility requirement placed on omnibus account holders (foreign financial investment businesses) remains too restrictive and that there are no guidelines on omnibus account to facilitate its usage.
In this regard, in April 2025, the FSC, along with the Financial Supervisory Service (FSS) and the Korea Financial Investment Association (KOFIA), granted a regulatory exemption under the financial regulatory sandbox program to assist a domestic securities firm to form a partnership with an overseas small- or medium-sized financial investment business and to enable the latter to open an omnibus account with the domestic securities firm.
Through this, the first omnibus account for foreign investors has been opened in August 2025 (Hana Securities-Emperor Securities), and other securities businesses (Samsung Securities and Yuanta Securities) are also following suit through the regulatory exemption program (designated in September 2025).
In addition, after taking into account various opinions and questions raised by domestic securities businesses, standing proxies, and foreign institutional investors, the FSC and related organizations have jointly prepared guidelines on the use of omnibus account for foreign investors.
Key Details
The guidelines on the use of omnibus account for foreign investors provide step-by-step procedural details regarding (a) the opening of omnibus account, (b) allocation of shareholder rights, (c) reporting duty, and (d) the management of internal control aimed at preventing unfair trading and/or money laundering activities.
a) Opening of omnibus account
The opening of an omnibus account involves the following procedure. First, the signing of an agreement takes place for the opening of an omnibus account between a foreign financial investment business and a domestic securities business. Second, the foreign financial investment business opens a custodial account with a domestic standing proxy. Third, an omnibus account is created for the foreign financial investment business. The agreement signed between a foreign financial investment business and a domestic securities firm contains details regarding the obligations to submit transactions records for each end-investor when requested by the regulatory authority, perform customer due diligence (CDD) on the actual holder of securities, and establish and maintain internal control mechanisms for preventing unfair trading activities.
b) Allocation of shareholder rights
The method for exercising shareholder rights for omnibus account will be identical to the exercise of shareholder rights for ordinary securities accounts in principle. However, when there are varying degrees of voting rights for different end-investors, in accordance with the Commercial Act, the foreign financial investment business (omnibus account holder) may collect opinions from end-investors and exercise voting rights in disunity. In addition, the Korea Securities Depository (KSD) allocates dividend rights en masse to the omnibus account holder (foreign financial investment business), which then pays out dividends to end-investors in a proportionate way.
c) Reporting duty
Overseas financial investment businesses should either directly or through a standing proxy keep a record of end-investors’ stock transactions for 10 years, and submit a transactions record to the domestic securities business with which it has opened the omnibus account in accordance with the form prepared by the FSS on a monthly basis (until the 10th of the following month from the last day of every month).
d) Internal control management
Domestic securities businesses need to conduct a prescreening on foreign securities businesses to see whether they have been subject to any sanctions, whether they have maintained a valid license for operation, and whether they have adequate internal control mechanisms for preventing unfair trading and/or money laundering activities, while carrying out inspections on a regular basis to make sure their compliance with the customer due diligence (CDD) duty and the reliable operation of internal control systems.
Expectation and Further Plan
An English translated version of the guidelines will also be made available. With the establishment of the guidelines, the issue of uncertainty regarding the process for opening and managing omnibus account for overseas financial investment businesses will be largely removed, and the guidelines will facilitate a wider use of omnibus account.
Within December this year, the FSC plans to finish up making relevant rules change to the regulation on financial investment businesses, abolishing the current restriction that allows only certain types of overseas securities businesses (a subsidiary or major shareholder of a domestic financial investment business) to open an omnibus account.
With an increased use of omnibus account, nonresident foreigners will be able to directly trade Korean stocks through local securities firms without the need to open a securities account with a domestic securities business. This will help to improve foreign investors’ access to domestic stock markets and facilitate an inflow of foreign investments.
The FSC and related organizations will continue to closely communicate with the financial investment industry to seek areas for further improvements and make continuous updates to the guidelines accordingly.
* Please refer to the attached PDF for details.