The Korea Herald

피터빈트

Brokerages allowed to handle more foreign exchange services

By Korea Herald

Published : April 15, 2012 - 20:02

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South Korea’s financial authority said on Sunday it would allow local brokerages to expand their foreign exchange business while sharing more currency data among state-run watchdogs.

The Ministry of Strategy and Finance said dozens of changes to foreign exchange regulations would come into effect on April 30, striking a balance between deregulation and enhanced market monitoring.

Securities houses will be allowed to handle a variety of currency-related services concerning working capital of funds, payment of various fees and acting as an intermediary for M&A transactions.

The expanded scope is a departure from the longstanding regulations that limit brokerages’ foreign exchange services to a simple conversion of investment money for stocks and bonds.

The move is aimed at helping domestic brokerages get ready to play the role of investment banks as the deregulations would free up more financial and investment-related services.

The Finance Ministry said the regulations on derivatives denominated in foreign currencies would be also loosened so that brokerages could handle commodity-based investment products without getting approval from the Bank of Korea.

In return for the deregulatory measures, the ministry said it would share more foreign exchange information with the tax and customs authorities to block tax evasion ― a move that has been proposed by the National Assembly.

The ministry said the details of the revision to the related regulations would be posted on its homepage on Monday.

By Yang Sung-jin (insight@heraldcorp.com)