Korea remained on an emerging market list Friday by global index provider Morgan Stanley Capital International (MSCI) as the country reimposed a ban on stock short-selling.

Korea has undertaken a series of market reform measures to receive a development market status in the MSCI index. Those measures include its plan to improve the country's foreign exchange (FX) market, in which foreign institutions would be allowed to participate in the onshore interbank FX market upon registration, extend trading hours.

MSCI said it welcomes Korea's recently proposed measures aimed at improving the accessibility of the Korean equity market.

But in November last year, Korea reintroduced a full ban on short selling, citing some illegal trading practices.

"While this ban is expected to be temporary, sudden changes in market rules are not desirable," MSCI said in a statement.

"As a reminder, potential reclassifications require that all issues have been addressed, reforms have been fully implemented, and market participants have had ample time to thoroughly evaluate the effectiveness of the changes," it added.

Every year in June, the MSCI reclassifies its watch list of emerging markets and developed markets based on the countries' economic development, size and liquidity of equity markets, and market accessibility for foreign investors.

Earlier, Korea's financial regulator said it will lift a ban on stock short selling on March 31 next year after completing building a computerized monitoring system on illegal short selling. (Yonhap)