Foreign Financial Firms Entering the Forex Market Granted Enforcement Grace Period Until Year-End Despite Compliance Violations

Kim Byung-hwan, Vice Minister of Strategy and Finance, is delivering opening remarks while presiding over the 'Foreign Exchange Soundness Council' held on the morning of the 4th at the Bankers Hall in Jung-gu, Seoul.

The Ministry of Economy and Finance has decided to postpone sanctions on foreign institutions participating in the domestic foreign exchange market until the end of this year. As new participants in the won market, the ministry plans to give them time to adapt to various regulations.

On the 4th, the Ministry of Economy and Finance announced this during the 'Foreign Exchange Soundness Council' held at the Bankers Hall in Jung-gu, Seoul, chaired by First Vice Minister Kim Byung-hwan. The meeting was held to share and assess preparations ahead of the extension of the foreign exchange market closing time. The domestic foreign exchange market, which used to close at 15:30 on the day, is scheduled to extend its closing time to 2 a.m. the next day.

The government has decided to postpone sanctions for violations of foreign exchange authority obligations by overseas foreign exchange business handling institutions (RFI) until the end of this year. This measure is intended to allow sufficient time to become familiar with the foreign exchange authority reporting procedures. The reporting burden will also be eased within the scope that does not significantly affect the monitoring system. For cases that are physically difficult or legally restricted, related items will be abolished.

Additionally, third-party foreign exchange transactions will be activated so that foreign investors can choose financial institutions, domestic or overseas, that offer competitive prices for transactions regardless of whether they open accounts in their own names. To minimize various settlement risks, the ministry also plans to support market stabilization by utilizing temporary won borrowing systems and other measures.

Transactions within the integrated government bond account will allow won settlements even for non-residents. Through this, the plan is to help foreign investors conveniently trade government bonds and monetary stabilization bonds. Interest repayments will also be permitted to be made in won within the account without separate additional currency exchange.

Vice Minister Kim said, “To successfully establish improvements in the foreign exchange market structure, even the detailed regulations and practices of our market must be aligned with global standards,” and emphasized, “Efforts should not be limited to one-time institutional improvements but should lead to actual investment expansion by major investors and financial institutions in the domestic capital market, requiring continuous inspection by foreign exchange and financial authorities.”