Samsung, Hana emerge as early winners through overseas brokerage tie-ups
South Korean brokerages are betting that the retail expansion of omnibus accounts for foreign investors could trigger a wave of overseas money into the local stock market, with industry officials expecting as many as 10 million additional foreign retail accounts to gain access to Korean equities.
The growing optimism has turned omnibus accounts into one of the hottest themes in Korea’s brokerage industry, with Samsung Securities and Hana Securities emerging as early frontrunners after securing partnerships with major overseas trading platforms.
The omnibus account system allows nonresident investors to trade Korean equities directly through overseas brokerages they already use in their home markets, eliminating the need to open separate accounts with local securities firms.
The system was first introduced in 2017 to improve foreign investor access to Korea’s stock market, but adoption remained limited because regulators restricted eligibility to only a small number of institutions.
The Financial Services Commission lifted those restrictions in January as part of the government’s broader capital market reform roadmap aimed at securing the nation’s upgrade to developed-market status in the Morgan Stanley Capital International index classification.
Industry officials say the regulatory overhaul could dramatically lower barriers for overseas retail investors at a time when the Kospi is extending its record rally above 7,500.
Samsung, Hana move first
Samsung Securities and Hana Securities have taken the lead in launching the service.
Samsung Securities partnered with Interactive Brokers, one of the world’s largest online brokerages, with roughly 4.65 million client accounts globally. IBKR began pilot operations for omnibus account trading through Samsung Securities in late April, with a full launch expected soon.
The market reacted quickly. Samsung Securities shares surged nearly 40 percent this month and briefly hit the daily trading limit after news of the IBKR partnership fueled expectations of large inflows from US retail investors.
Hana Securities, meanwhile, launched the industry’s first omnibus account transaction with Hong Kong-based Emperor Securities last year.
It has also integrated Korean stock quote data into the mobile platform of Hong Kong brokerage Futu Securities, which operates around 3.36 million accounts primarily across Greater China and Asia. Trading of Korean stocks through Futu is expected to begin after account opening procedures are completed in June.
“About 10 million additional foreign retail investors could enter the Korean stock market through omnibus accounts. Taking the early mover advantage, Samsung Securities and Hana Securities are expected to secure nearly 80 percent of the nascent market,” an industry source close to the matter said.
Why brokerages are excited
With the Kospi hitting record highs, brokerages are moving aggressively to capture new foreign demand.
Six additional securities firms — Yuanta Securities Korea, Meritz Securities, Mirae Asset Securities, Shinhan Securities, NH Investment & Securities and KB Securities — are also preparing to launch their own omnibus account services.
Analysts say the timing is favorable as Korea’s semiconductor-driven earnings recovery strengthens the appeal of local equities.
“Solid earnings growth is expected, particularly in the semiconductor sector, and accessibility for overseas retail investors could improve through global online brokerage platforms such as IBKR,” said Ko Yeon-su, an analyst at Hana Securities.
Brokerage houses are also viewing omnibus accounts as a structural growth opportunity rather than a short-term trading theme.
Baek Du-san, an analyst at Korea Investment & Securities, estimated that if the market expands successfully, Samsung Securities’ annual brokerage commissions alone could rise by more than 5 percent.
Analysts say the broader significance lies in bringing Korea’s market infrastructure closer to global standards while potentially expanding long-term foreign participation in domestic equities.
ch0221@heraldcorp.com
