The government met with global investors to share updates on recent reforms in the foreign exchange and capital markets, assessing whether these changes are functioning effectively in domestic securities investment. Investors responded positively to improvements aimed at enhancing the convenience of transactions for foreign securities firms, but suggested that ongoing monitoring of the new system's detailed operations and utilization is necessary.
Moon Ji-sung, Director General of International Economic Affairs at the Ministry of Economy and Finance, held the second 'Global Core Investor Council' meeting via video conference on September 29, where he outlined recent reforms in the foreign exchange and capital markets. Participants included global asset management firms such as BlackRock, Amundi, Northern Trust, and State Street, along with representatives from the Asia Securities Industry and Financial Markets Association (ASIFMA) and the Global Foreign Exchange Division (GFXD). Relevant agencies such as the Financial Services Commission, Bank of Korea, Financial Supervisory Service, Korea Exchange, and Korea Securities Depository also attended.
During the meeting, the government provided updates on several initiatives, including the pilot operation of the 'International Won Payment Network,' the publication of a FAQ on foreign exchange regulatory improvements, the easing of borrowing restrictions for foreign securities firms, enhancements to the Korea Securities Depository's payment facilitation system, and the establishment of an aftermarket at the Korea Exchange.
The International Won Payment Network began its pilot operation on September 21. The registration requirements and procedures for overseas institutions handling won transactions (RFI-K) have been streamlined, with six overseas branches of domestic banks—Kookmin, Woori, Hana, and Shinhan—registered as RFI-Ks to conduct won transactions. Additional participation from foreign financial institutions is expected before the full operation begins in January.
The FAQ on foreign exchange regulatory improvements was published with 38 questions addressing key inquiries from foreign investors and financial institutions, with plans for ongoing updates as new questions arise.
To enhance liquidity for foreign securities firms, the government will allow overseas borrowing in won and foreign currency for domestic branches starting in the fourth quarter of this year, and plans to increase the borrowing limits for domestic corporations that require prior notification to the Ministry of Economy and Finance.
The Korea Securities Depository's payment facilitation system has been improved to allow payments in both cash and securities starting today. From October, securities expected to be settled on the same day through the exchange will also be recognized as collateral.
Trading hours for domestic securities have also been extended. The Korea Exchange has increased stock trading hours from 4 PM to 8 PM since September 14, allowing both domestic and international investors more time to trade.
Global investors have noted that the easing of borrowing restrictions for foreign securities firms could enhance the convenience of securities settlement and trading for foreign investors. However, they emphasized the need for continuous monitoring to ensure that the newly introduced systems operate reliably during the investment process.
Regarding the proposed shortening of the stock settlement period to T+1, there were calls for adequate preparation and pilot operations before implementation. The government stated it would maintain open communication with market participants throughout the process.
Relevant agencies will continue to monitor and address any challenges that arise during the implementation of these reforms based on feedback from investors. The government plans to operate the Global Investor Council as a regular communication channel to enhance market accessibility and the perceived effectiveness of regulatory improvements.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.