National Growth Fund Investors Will Be Able to Trade Through Their Preferred Brokerage Firm; KOFIA Begins System Build

[Financial News] The Korea Financial Investment Association (KOFIA) has begun revising its rules to allow changes in the sales company for the National Growth Fund. Investors are expected to be able to move their subscription account to a different financial institution and trade the fund in a listed form through the securities account of their preferred brokerage firm.
According to the financial investment industry on the 28th, KOFIA recently amended the Detailed Rules on the Business and Operations of Financial Investment Companies to include the National Growth Fund, officially known as the National Participation-Type National Growth Collective Investment Securities Savings, among products eligible for a change in sales company. The revised rule took effect on the 22nd.
Until now, ordinary public funds could freely change their sales company if certain requirements were met. However, funds held in tax-advantaged accounts such as ISA (Individual Savings Account), Tax-Free Comprehensive Savings, and Tax-Preferred Comprehensive Savings had been excluded because managing tax information is more complicated. The National Growth Fund had also been restricted for the same reason.
However, because the National Growth Fund is structurally a closed-end fund that is difficult to redeem early, a listing on the securities market is being pursued to secure investor liquidity. Accordingly, KOFIA plans to build the related infrastructure so that investors can change their subscribing financial institution to a brokerage firm of their choice and then trade directly in the market.
To that end, KOFIA plans to discuss system-building measures for changing sales companies with related institutions, including the Korea Federation of Banks (KFB) and the Korea Securities Depository (KSD). Industry observers say the reform could improve trading convenience for the National Growth Fund and may also lead to broader discussions on improving the distribution and trading structure of policy-driven long-term investment products.

khj91@fnnews.com Kim Hyun-jung Reporter