SEOUL—South Korea is set to ease registration and reporting requirements for foreign financial institutions in an effort to enhance trading conditions and encourage greater participation in its foreign exchange (FX) market, the finance ministry announced on Wednesday. This move is a continuation of deregulation measures initiated in July, aimed at making the financial market more accessible and competitive.
According to Yonhap News Agency, the new regulations will simplify the process for foreign entities to engage in the interbank forex market by reducing the prerequisites for establishing credit lines. Previously, foreign firms needed to set up credit lines with at least ten domestic companies, a process that could take years. Additionally, the requirement for foreign firms to report daily borrowings, trades, and other operational details will be removed. These changes are expected to quicken market entry and reduce administrative burdens for foreign traders.
The ministry also noted an extension in the operating hours of the won-U.S. dollar exchange market, now running from 9 a.m. to 2 a.m. the following day. To enhance liquidity during extended trading hours, particularly after 11 p.m., additional incentives will be offered to local trading firms. "Trading during extended hours had been stable in July. But it is needed to boost the participation and trading by registered foreign institutions (RFIs) and to secure enough liquidity during nighttime trading," the ministry stated. Government data reflected a 10.7 percent increase in total spot trading volume last month, amounting to an average of US$11.73 billion.