Published 21 Feb.2024 17:30(KST)
The Ministry of Economy and Finance announced on the 21st that it has prepared the "Measures to Enhance Convenience of Domestic Securities Settlement and Currency Exchange for Foreign Investors," which allows foreign investors investing in the domestic capital market to trade domestic stocks and bonds without inconvenience or additional currency exchange costs due to currency exchange procedures.
The Ministry of Economy and Finance, together with the Financial Services Commission, the Bank of Korea, and the Financial Supervisory Service, held investor briefings in London and collected market opinions to effectively implement the "Foreign Exchange Market Structural Improvement" announced in February last year, and reflected these to prepare the convenience enhancement measures.
The main content is to allow "temporary won overdraft" to reduce the burden of settlement failures caused by delays in currency exchange procedures. Even if a temporary shortage of won occurs during the currency exchange process for securities settlement with financial institutions other than the main bank, as long as the fact that an actual foreign exchange transaction contract existed is proven to the domestic managing bank, the settlement payment for securities trading can be borrowed.
In addition, individual investors will be able to freely send and receive won funds deposited in the international central securities depository through separately opened won accounts.
When foreign investors invest in the domestic capital market using the integrated stock account (foreign integrated account) under the Capital Market Act through foreign financial investment firms such as global asset management companies, they will be able to conveniently exchange currency without appointing a separate standing agent. Previously, if a foreign asset management company established 100 sub-funds investing in semiconductors or secondary batteries, it had to open 100 securities and payment accounts at securities firms and banks and exchange currency for each account, but from now on, securities trading and currency exchange will be possible at once.
The Ministry of Economy and Finance stated, "The foreign exchange and financial authorities will pursue amendments to the 'Foreign Exchange Transaction Regulations' in the first quarter to resolve the above issues," and added, "We will continue to identify necessary tasks to improve foreign investors' accessibility to the domestic market."
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