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Fintech

RIA deduction rate cut to 80 percent amid muted return of Korean retail investors

The tax deduction rate on capital gains from overseas stocks in return-to-domestic-market accounts (RIA) fell to 80 percent this month from 100 percent, and will drop to 50 percent from August, complicating efforts to draw overseas equity money back to South Korea. Data showed limited domestic inflows through RIA and a May shift to net selling of U.S. stocks, while U.S. stock holdings by Korean investors still rose. Industry voices call for measures beyond tax breaks to boost the appeal of local markets.

Finance

Securities industry says stability comes first as T+1 settlement shift gains speed

Discussions are accelerating in South Korea on shortening the stock market settlement cycle from T+2 to T+1, but brokerages and related agencies said stable preparations in back-office operations must come first. They cited issues including foreign investor settlement and currency conversion, securities lending, ETF creation and redemption, and system overhauls. Participants also stressed automation and standardisation, warning that inadequate readiness could undermine settlement stability and market trust.

Finance

Stock T+1 settlement talks gain momentum, calls to bring forward timeline

Talks on shortening South Korea’s stock settlement cycle gathered pace after data showed securities firms earned 180.5 billion won in interest over three years while holding clients’ settlement funds. Park Yong-jin (박용진), vice chair of the Regulatory Rationalisation Committee, urged authorities to bring forward the planned start date of around October next year and to explain progress transparently. Korea Exchange Chairman Jung Eun-bo (정은보) said T+1 is becoming a global standard but stressed stable implementation.