Finance ministry issues notice for revision to FX transactions act

Finance

Published: 14 Apr. 2023, 15:30

Finance ministry issues notice for revision to FX transactions act

An employee organizes dollars at Hana Bank in central Seoul on April 5. [YONHAP]

The finance ministry issued a legislative notice for a planned revision of the Enforcement Decree of the Foreign Exchange Transactions Act.

It is part of the ministry’s efforts to improve the foreign exchange system by facilitating the procedure for foreign exchange transactions and easing regulations, said the ministry on Friday.

The penalty for not reporting transactions on foreign direct investment and acquisition of overseas real estate will be reduced to 2 million won ($1,540) from the previous 7 million won. That is the same amount of fine levied on people who don't make a prior report on foreign transactions that exceed $50,000 annually.

The ministry added it will make foreign exchange transactions more predictable for traders by giving prior notice before they are halted from trading. It also plans to establish a committee dedicated to improving the foreign exchange system with a goal to hear the opinions of the industry, academics and the private sector in the process of improving the operation of the system.

The pre-announcement period is through May 8, and the revision is scheduled to take effect starting in the second half of this year following necessary procedures.

The finance ministry announced a set of plans to ease foreign exchange trading earlier this year to upgrade Korea’s financial market. The plans include extending foreign exchange trading hours to 2 a.m., and ultimately to 24 hours a day.

The market currently runs from 9 a.m. to 3:30 p.m.

The finance ministry expects such changes to raise transaction volume of the currency and attract diverse market participants.

BY JIN MIN-JI [jin.minji@joongang.co.kr]