Foreign Exchange Market Operating Hours Extended—And Numerous Other Changes

The Korean government will extend the operating hours of the foreign exchange market until 2 am from the second half of next year and improve the system so that foreign investors can directly participate in the domestic foreign exchange market.

The minister of the Ministry of Economy and Finance announced on the 12^th that the “Foreign Exchange Market Advancement Plan” will be announced in February. While the current market opens at 9:00 am and closes at 3:30 pm, the plan will extend the foreign exchange market operating hours by more than 10 hours until 2:00 am in line with the closing time of the London market.

Currently, the domestic foreign exchange market is available only to government-approved financial institutions, and foreign financial institutions must have branches in Korea. This will be changed to allow foreign financial institutions located abroad to participate in the domestic foreign exchange market.

Within this month, plans to improve the stock market system’s consistency and compliance with the international regulatory standard will be also announced. The minister announced at the press conference, “In order to increase the accessibility of foreign investors, we will abolish the investor registration obligation and prepare a plan to promote the use of Omnibus Accounts, which will be implemented from the second half of this year. English disclosure will be mandatory from next year, as well.”

The plan aims to increase investment convenience by substituting the investor registration obligation with internationally used personal passport numbers and corporate LEI (Legal Entity Identifier) numbers. Companies subject to English disclosure will be expanded to KOSPI-listed companies with assets of 10 trillion won or more next year and assets of 2 trillion won or more by 2026.

In addition, a plan to improve the dividend system to promote long-term investment will be prepared and implemented next year after a preparation period.

In the current system, as the shareholder to receive the dividend is determined first at the end of December of the previous year and the dividend amount is determined later in mid-to-late March, problems arise with the low predictability of the dividend amount at the time of investment. Accordingly, the government aims to alleviate the problem by having the dividend amount available for investors to check before the shareholders receiving the dividend are determined.

Furthermore, the minister provided more information on the plan to amend the Foreign Exchange Transactions Act stating, “By converting the principle of preliminary reporting in foreign exchange transactions to post-reporting, the regulatory burden of the people, companies, and foreign investors can be greatly reduced.”

As for the government bond market, he commented, “Following the implementation of tax exemption on interest and capital gains from foreign investors, we will continue to make efforts to improve investment conditions and strive to be quickly incorporated into the World Government Bond Index (WGBI).”

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