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

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

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

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 a year in order to avoid submitting documentary evidence of the fund, starting from June, they will be able to do the same for up to $100,000 a year.

Furthermore, the revision means that businesses in the country are no longer limited to $30 million in terms of the amount of foreign currency they can borrow without having to report it to the country’s Finance Ministry. The amount has now been reviewed upwardly to $50 million. The change came in response to South Korean business owners’ desire to expand their global presence.

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

South Korea Embraces Offshore Firms in FX Markets

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

Currently, only 54 certified local financial institutions, including banks and securities firms, are approved to participate in South Korea’s interbank forex market. However, the government intends to change this by permitting registered offshore firms, with the exception of principal trading firms and hedge funds, to engage in the country’s spot and forex swap exchanges.