South Korea has again failed to win inclusion on a watch list for developed market status from global index provider Morgan Stanley Capital International(MSCI). 

In an annual market reclassification released Tuesday, the global provider of investment data and analytic services kept South Korea in the “emerging market” group.

After a year on the watch list, a country can be added to the “developed markets” index. 

MSCI classifies countries based on economic development, the size and liquidity of its equity markets, and market accessibility for foreign investors.

MSCI said there have been regulatory and technical enhancements, along with the recent removal of a ban on short selling. 

But it added that while market activity has recovered, investor concerns remain regarding the operational burden of compliance and the risk of abrupt regulatory shifts.