South Korea fails again to make MSCI developed market watchlist

South Korea's stock market has once again fallen short of a key milestone on the path to inclusion in the MSCI Developed Markets index.

In its annual market classification review released Tuesday, MSCI did not add South Korea to the Developed Markets Watch List.

MSCI said it "acknowledges the measures announced by Korean market authorities to address longstanding concerns," but added that "investors have indicated that the fundamental issues have not been fully resolved."

MSCI pointed to continued restrictions on won trading in offshore foreign exchange markets as one of the key barriers, saying further improvements to market accessibility are needed.

South Korea was placed on the MSCI Developed Markets Watch List in 2008 but failed to secure an upgrade due to market accessibility issues and was removed from the list in 2014. Since then, the government has pursued a series of reforms — including opening the foreign exchange market, expanding English-language corporate disclosures and overhauling the short selling regime — in a bid to regain watchlist status.