On September 29, Deputy Minister for International Affairs at the Ministry of Finance and Economy (MOFE) Moon Ji Sung convened the second meeting of the Global Core Investor Consultation via videoconference. He briefed participants on recent reforms to the foreign exchange (FX) and capital markets and heard from investors about their investment experiences and challenges.
The meeting brought together major global asset managers, including BlackRock, Amundi, Northern Trust and State Street, as well as the Asia Securities Industry & Financial Markets Association (ASIFMA) and the Global Foreign Exchange Division (GFXD). Relevant Korean authorities and institutions also participated, including MOFE, the Financial Services Commission (FSC), the Bank of Korea (BOK), the Financial Supervisory Service (FSS), the Korea Exchange (KRX) and the Korea Securities Depository (KSD).
The government first briefed investors on recent progress in FX and capital market reforms, including ❶ the pilot operation of the International KRW Settlement Network; ➋ the publication and distribution of FAQs addressing key questions on recent FX reforms; ❸ measures to improve settlement liquidity for foreign securities firms, including the easing of restrictions on their overseas borrowing; ❹ improvements to the KSD settlement facilitation payment system; and ➎ the launch of the KRX After-market (16:00-20:00).
Participating investors noted that measures such as easing restrictions on overseas borrowing by foreign securities firms would make securities settlement and trading more convenient for foreign investors. They also positively assessed the government’s continued efforts to listen to market feedback and actively incorporate it into the reform process. In addition, they suggested that the government continue to monitor the detailed operation and actual use of the newly introduced measures to ensure that they function smoothly in the investment process.
[Progress on Major FX and Capital Market Reforms]
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Major Reform Measures |
Details |
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1. Pilot Operation of the “International KRW Settlement Network” (from Sep. 21) |
▸ Completed revisions to relevant regulations, including registration requirements and procedures for Registered Foreign Institutions for KRW Business (RFI-Ks), which conduct KRW transactions overseas.
▸ Six overseas branches of Korean banks, including KB Kookmin, Woori, Hana and Shinhan, have registered as RFI-Ks* and are conducting KRW transactions through the International KRW Settlement Network.
* Additional participation by foreign financial institutions and others is expected before full-scale operation begins in January 2027.
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2. Publication of FAQs on FX Reforms (Sep. 29) |
▸ Compiled and distributed 38 FAQs addressing key questions from overseas investors and financial institutions regarding FX reforms, with additional FAQs and updates to follow.
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3. Easing of Restrictions on Overseas Borrowing by Foreign Securities Firms (Q4 2026) |
▸ (Domestic branches) Permit overseas borrowing in KRW and foreign currencies (currently not permitted).
▸ (Domestic subsidiaries) Raise the threshold for KRW borrowing subject to prior reporting to MOFE.*
* Currently, prior reporting to MOFE is required when cumulative annual borrowing exceeds USD 50 million or KRW 1 billion; amounts below the threshold are subject to reporting to banks. |
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4. Improvements to the KSD Settlement Facilitation Payment System |
▸ Allow payments to be made in securities instead of cash (from Sep. 29); securities scheduled to be received through on-exchange settlement on the same day will also be recognized as collateral (Oct. 2026).
▸ Guidelines were issued to enable participants to estimate payment amounts in advance (Aug. 26).
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5. Launch of the KRX After-market |
▸ Since September 14, the KRX has extended stock trading hours from 16:00 to 20:00, expanding the hours during which domestic and foreign investors can trade Korean securities.
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Meanwhile, global investors also shared a range of views on shortening the equity settlement cycle to T+1. They suggested that any move toward a shorter settlement cycle should proceed only after sufficient preparation and pilot testing. The government stated that it would maintain close communication with both domestic and foreign market participants as it moves forward with the initiative.
Based on the feedback raised by investors, the relevant authorities and institutions agreed to continue monitoring and addressing difficulties encountered by investors in the operation of the new measures. Going forward, the government plans to maintain the Global Core Investor Consultation as a regular channel of communication with global investors, while further improving investor access to the market and making the benefits of the reforms more tangible to investors.
Please refer to the attached files.
