South Korea's foreign exchange authorities planned to monitor foreign capital flow by securities such as stocks and bonds in a bid to secure more concrete information on such capital flow in and out of the country, the central bank and the finance ministry said on Monday.

Foreigners will be required starting April 1, 2013 to report their money depositing into and withdrawal from the combined investment accounts by financial products such as stocks, bonds and derivatives, according to a joint statement by Bank of Korea ( BOK) and the Ministry of Strategy and Finance.

Under the current regulation, foreign investment into local financial products is reported and managed at the combined investment account, making it difficult for the authorities to secure information on foreign capital flow by financial products.

After selling local shares and bonds, for example, foreigners can re-invest the money secured through the sales into the local financial market, or repatriate the money into their homeland. The total capital flow by foreigners can be monitored under the combined investment account structure, but the respective fund flow by securities cannot be monitored.

By getting information on foreign capital flow by respective financial products, the authorities will be able to more closely monitor the possible impact of the foreign capital into the local financial market and take preemptive action against the potential adverse effects, the central bank and the finance ministry said. Endi

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