Seoul: South Korea on Wednesday announced revised rules for registered foreign institutions (RFIs) as part of the ongoing effort to make the won a freely convertible currency, the finance ministry said. The Ministry of Finance and Economy revealed the changes aimed at easing foreign financial institutions' operations in the country's foreign exchange market.
According to Yonhap News Agency, the guidelines were updated following a public comment period and a regulatory review by the Office for Government Policy Coordination. With these revisions, foreign financial institutions registered with the ministry will be permitted to open omnibus accounts at domestic foreign exchange banks. This change facilitates the settlement of won transactions through the Bank of Korea Won International Wire Network, thus enabling offshore won settlement without time or location constraints.
Foreign institutions interested in conducting offshore won business must register separately with the finance ministry as a Registered Foreign Institution for KRW Business (RFI-K). Once registered, these institutions can serve clients who do not reside in South Korea, allowing them to open won-denominated accounts and engage in remittances, investments, and lending and borrowing transactions.
The registered institutions are required to verify their clients' foreign nonresident status and submit monthly transaction reports to the central bank. The government will carry out necessary reviews of the institutions' financial soundness and will closely monitor their transactions in cooperation with the central bank, the finance ministry stated.