MSCI’s latest market‑accessibility review flags several hurdles that could delay South Korea’s move toward developed‑market status. The index provider praised progress toward a 24‑hour foreign‑exchange market but warned that an absent offshore won‑market and incomplete short‑selling settlement reforms still blunt investor access. These gaps could dent the country’s bid to climb the MSCI ladder for global funds and investors.

South Korea lifted its short‑selling ban in 2025, yet “frictions have emerged in practice,” MSCI noted, citing refinements to infrastructure. The review also highlighted unclear funding‑calculation rules that inflate settlement inefficiencies. Meanwhile, the Kospi has doubled this year, powered by gains in Samsung Electronics and SK Hynix, reflecting optimism around President Lee Jae Myung’s reforms to narrow the Korea discount.

Despite these setbacks, most investors see South Korea’s eventual upgrade as inevitable, given the market’s size and liquidity. However, the MSCI review signals that regulatory friction will keep the country in the emerging‑market bracket at least until June 23, when the annual classification is released. Until then, global funds may curb exposure, weighing on short‑term trading volumes for investors there.