South Korea needs to work on opening up access to its capital market including extending currency trading hours, according to MSCI Inc., as the nation seeks an upgrade to developed market status.

Outstanding issues for Asia’s fourth-largest economy include the lack of offshore trading for the won as well as limits on short selling, MSCI said in its market accessibility review released late Thursday.

The concerns are similar to 2022’s review, although the index compiler said that measures announced by Korea’s government to address some of the worries “will be thoroughly evaluated with international institutional investors” once fully implemented.

Korea has a long-standing bid to join the league of developed market countries as it seeks to bolster its international reputation and attract foreign investments. President Yoon Suk Yeol has rolled out a slew of measures recently to rectify “outdated regulations” and better protect minority shareholders, which include removing registration requirements for overseas investors and improving transparency on dividends.

The report is an early indicator for how MSCI views market accessibility in individual countries and comes ahead of an annual classification review later this month, where the index compiler may put certain nations on a watchlist for potential upgrade or downgrade.

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Market accessibility is one of the three criteria that MSCI considers when it classifies markets into developed, emerging and frontier, alongside economic development, and size and liquidity. The index compiler dropped Korea from its developed market watchlist in 2014, saying it failed to meet the necessary criterion.

--With assistance from Jaehyun Eom.