Overseas financial firms allowed to trade in Seoul's forex market: FSS chief

Financial Supervisory Service (FSS) Governor Lee Bok-hyun speaks during a meeting with CEOs of foreign financial companies at the Fairmont Ambassador Seoul in Yeouido, Seoul, Wednesday. Courtesy of Financial Supervisory Service

FSS governor vows to raise foreign investors' accessibility to Korean capital market

By Anna J. Park

Global financial companies operating in overseas markets will be allowed to participate in Seoul's local foreign exchange (forex) market, according to Financial Supervisory Service (FSS) Governor Lee Bok-hyun. This is part of the financial authorities' measures to raise the Korean capital market's accessibility to foreign investors.

During a meeting with heads of foreign financial companies operating in the country on Wednesday, the FSS chief said the Korean government is on course to ease forex market regulations, aiming to innovate the system to have a more open and competitive nature.

“The financial authorities have decided to permit overseas financial companies, operating in other countries, to join the trading in Seoul's forex market. In addition, the opening hours of the local forex market will be extended to the closing time of global financial markets, such as London's,” Lee said during the meeting at the Fairmont Ambassador Seoul in Yeouido, Wednesday.

The head of the state-run financial watchdog agency also pledged to speed up the process of registration and evaluation of offshore mutual funds. Lee stressed that the FSS has strengthened the workforce of its fund evaluation department through organizational reshuffles earlier this year, in response to foreign financial firms urging them to accelerate the local registration process, as the number of offshore funds has been increasing steadily in recent years.

“Regarding the matter of delays in offshore funds' registration and evaluation process, which was raised during last year's meeting with heads of foreign financial companies, the FSS has opened up a new department that's dealing exclusively with the funds' registration and evaluation process, while bolstering the size and quality of the staff,” the FSS chief said during the meeting.

He went on to stress that the government has been taking a series of measures ― including the annulment of foreign investors' mandatory registration by the end of this year, a gradual increase of public disclosures in English and the improvement of dividend payment procedures ― to raise the competitiveness of the Korean capital market. He also vowed to increase the accessibility of the local bonds market, while overhauling financial security regulations to match global standards.

Financial Supervisory Service (FSS) Governor Lee Bok-hyun, sixth from left, stands with participants of a meeting with heads of foreign financial firms at the Fairmont Ambassador Seoul, Wednesday. From left are Eastspring Asset Management Korea CEO Park Cheon-woong, MetLife Insurance of Korea CEO Song Young-rok, ICBC Seoul Branch CEO He Xiaojian, MUFG Bank Seoul branch CEO Nakamura Shinkichi, HSBC Seoul branch CEO Jung Eun-young, Lee, AIA Korea CEO Nathan Michael Chuang, J.P. Morgan Korea CEO Howard Kim, Yuanta Securities Korea CEO Kuo Ming-Cheng, Goldman Sachs Seoul branch CEO Chung Hyung-jin, Baring Asset Management Korea CEO Park Chong-hak and ACE American Fire and Marine Insurance Company Korea CEO Edward Kopp. Courtesy of Financial Supervisory Service (FSS)

Attending the meeting were 11 CEOs of the Seoul branches of global financial firms: Goldman Sachs, J.P. Morgan Korea, HSBC, ICBC, MetLife Insurance of Korea, AIA Korea, ACE American Fire and Marine Insurance Company Korea, Yuanta Securities Korea, Baring Asset Management Korea, Eastspring Asset Management Korea and MUFG Bank.

During the closed-door meeting with the FSS chief, the participants asked the financial authorities to facilitate and further activate ESG principles and guidelines in the financial sector.

“Among other things, participating CEOs of foreign financial companies requested the FSS to assume an active role in facilitating ESG-related principles in financial sectors, such as green bonds or carbon-neutral investments, and come up with effective guidelines on the issue,” FSS Director-General Lee Jun-kyo, who leads the institute's international affairs, told The Korea Times about Wednesday's meeting.

“The participants also urged the financial authorities to take more initiatives in the areas of tax and deregulation, to further develop the country's financial framework and system into a global financial hub. FSS Governor Lee closely listened to those voices, vowing to give feedback on matters the CEOs brought up.”

He stressed that the FSS governor is widely open to receiving the opinions of global financial companies operating in the country.

Since last year, the financial authorities have been prioritizing bringing the country's capital market system in line with global standards via deregulation and innovation of the financial infrastructure.