South Korea’s market watchdog highlights pension fund’s role in market reforms By Reuters

SEOUL (Reuters) – The head of South Korea’s market watchdog on Thursday stressed the importance of the public pension fund’s role in the success of ongoing capital market reforms, prompting the fund to invest more in the domestic market.

“The responsible role of pension funds and asset management firms as long-term investors is essential to broadening the investment base in the capital market,” said Lee Bok-hyun, governor of the Financial Supervisory Service (FSS).

Lee cited market participants’ assessment that Japan’s public pension fund’s increased domestic market investments contributed to the success of its market reforms.

In February, South Korea unveiled a “Corporate Value Enhancement Program” that mirrors Japan’s capital market reforms to boost the domestic stock market with measures to encourage more shareholder returns by listed companies. Since then, he has come up with several follow-up measures, including tax cuts, to strengthen the program.

Lee’s comments came at a forum co-hosted by the FSS, the National Pension Service (NPS), the world’s third-largest pension fund with 1,147.0 trillion won ($857.12 billion) in assets. at the end of June, and Korea Exchange.

In recent years, NPS has aggressively increased investment in overseas assets in a bid to earn higher returns and delay fund depletion. Its funds are expected to run out by 2056 due to a rapidly aging population.

In March, the NPS said it would make a decision on whether and to what extent it would allocate its assets to the government’s corporate reform drive after assessing the details of the plan. (1 dollar = 1,338,2000 won)