South Korea is trying to encourage greater activity in its Forex market. They have, therefore, been taking a number of steps to accomplish this. First off, they have extended the number of trading hours available for Forex day trading. This will be starting from the oncoming month. Secondly, they have even allowed outsider traders to participate in their Forex market. Foreigners will be able to make deals using Forex patterns, trading in Korean won.
The government convened this Monday to approve the move, changing their Foreign Exchange Transactions Act.
The change will take effect from the 4th of October onwards. The won market will open at 9 a.m. in South Korea; then it will go on to close at 2 a.m. Seoul time the next morning. This is so that foreign traders will get a chance to participate. Those living in vastly different time zones will finally be able to have access to this Forex market. They are targeting traders living in the US and Europe, according to their main financial ministry. To give an idea of how big a move this is, the current closing time for the market is 3:30 p.m. Furthermore, they hope to allow 24/7 access to Forex day trading eventually.
Korean Regulatory Changes Open Doors for Forex Day Trading
Those wanting to use the market will have to register in Korea as a Registered Foreign Institution (RFI). Doing so means meeting certain criteria that the Korean government sets. They will have to open an account dealing in won in a local Korean bank. Also, they will have to set up a credit agreement with a local bank.
They will be able to trade on Forex trading patterns with both currency spots and Forex swaps. At present, it is only local financial institutions that can take advantage of the domestic market. So opening up the market like this could mean a huge change.