Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Authorities revise rules on early morning FX transactions
The headquarters of Financial Supervisory Service (FSS) in Yeouido, Seoul, is seen in this undated file photo. Yonhap
By Anna J. Park
Korea's FX market hours to extend to 2 a.m. from July
Financial authorities have decided to recognize foreign exchange transactions that occur in the early morning hours as taking place on the previous day. This move aims to enhance market efficiency and align with global standards more effectively.
The Financial Supervisory Service (FSS) said Wednesday the move follows a decision authorities made last November to extend the opening hours of the foreign exchange market from the current 9 a.m. to 3:30 p.m. to 9 a.m. to 2 a.m. starting in July.
The extension of the trading day was implemented on a trial basis from January.
The FSS said it notified financial companies last week about the change in the local accounting rule on the transaction date. This change followed a series of consultations with approximately 60 financial companies.
"In order to ensure international consistency and operational efficiency, foreign exchange transactions occurring from [12:00 a.m.] to 2 a.m. the next day [T+1] will be counted as same-day transactions [T day]," the FSS said.
However, the financial watchdog added that other transactions with retail customers, such as interest calculations on non-settlement dates, should be calculated based on the regular calendar day. The same rule also applies to foreign exchange transactions occurring after 12:00 a.m. on their settlement date.
In November, the Ministry of Economy and Finance announced the extension of the trading hours will be institutionalized starting in July of this year to better align with global foreign exchange markets that operate all day.
The FSS plans to soon establish a clear legal framework for the changed accounting rule by amending banking supervision enforcement regulations.
"Financial institutions participating in the foreign exchange market, such as banks, will be able to autonomously determine their own closing hours of foreign exchange transactions, depending on their unique circumstances, such as trading currency, counterparties and trading volumes by time zone. Thus, the efficiency of operations is expected to be enhanced, while foreign exchange transactions during the early morning hours are expected to operate smoothly," the FSS said.
The FSS also plans to maintain a close consultative relationship with the foreign exchange authorities and participating financial institutions to provide necessary support.