Categories: Entertainment

South Korea Revises Decades-Old Forex Transaction Rules

South Korea’sfinancial authorities have settled to revise the country’s Foreign ExchangeTransactions Act that was introduced in 1999 following public outcry againstthe limits of the policy, Korea Times reports on Friday.

As part of the revision, the outlet reports, the South Korean government has sanctioned ninesecurities firms licenses to engage in the business of currency exchange, servingboth corporate and individual customers. Initially, only four brokers’ houseswere permitted, and they were limited to serving corporate investors only.

Korean Times further reports that the move will help reduce the commissioncharged for money exchange as banks and securities brokerages compete forclients.

South Korea Revises Policy Under Forex Transactions Act

The adjustment of the long-standing forex rules also affects other areas.For instance, while South Koreans currently have to remit less than $50,000 ayear in order to avoid submitting documentary evidence of the fund, startingfrom June, they will be able to do the same for up to $100,000 a year.

Furthermore, the revision also means that businesses in the country areno longer limited to $30 million in terms of the amount of foreign currencythey can borrow without having to report it to the country’s Finance Ministry.The amount has now been reviewed upwardly to $50 million. The changecame in response to South Korean business owners’ desire to expand their globalpresence.

Moreover, South Korean business organizations under the revised versionof the policy are no longer required to file regular reports to the country’sfinancial authorities about their overseas branches or stake of over 10% in aforeign company; they can now only fille the report once in a year.

South Korea Embraces Offshore Firms in FX Markets

Meanwhile, Finance Magnates recently reported that South Korea is seeking to approve the participation ofoffshore firms in its local forex markets in order to meet up with globalstandards. The country also plans to extend the running of its forex markets to 17hours a day in order to allow activities continue up to London’s business hours.

Currently, only 54 certified local financial institutions, includingbanks and securities firms, are approved to participate in South Korea’sinterbank forex market. However, the government intends to change this bypermitting registered offshore firms, with the exception of principal tradingfirms and hedge funds, to engage in the country’s spot and forex swapexchanges.

Korean Times further reports that the move will help reduce the commissioncharged for money exchange as banks and securities brokerages compete forclients.