South Korea's onshore foreign exchange market ran from 9am to 3.30pm Seoul time and admitted only domestic institutions. From January 2024 foreign financial institutions were allowed to register and participate directly, and from 1 July 2024 trading hours were extended to 2am the following day, covering the London session. Opening a market of this kind means deciding who may make a price, for how long, and how the resulting trades are settled.
Until 1 July 2024, the onshore market in the Korean won closed at half past three in the afternoon, Seoul time, and only domestic institutions were allowed into it. Both of those constraints have since been lifted, and watching a currency market be opened in stages is an unusually clear lesson in what such a market actually consists of.
Key Takeaways
- The onshore won market ran 9am to 3.30pm Seoul time and admitted only domestic institutions.
- From January 2024 foreign financial institutions were allowed to participate directly.
- From 1 July 2024 trading hours were extended to 2am the following day, covering the London session.
- Access runs through registration: a Registered Foreign Institution under the Foreign Exchange Transactions Act.
- Access and price are related, which is why the reforms are about cost as much as convenience.
What "closed" meant here
Precision matters here, because "closed currency" covers several different things.
Korea's restriction was not that the won could not be obtained. It was that the onshore market where the price was made ran from 9am to 3.30pm Seoul time, and that only domestic institutions could take part in it. Someone outside Korea wanting to deal in won did so at one remove, through counterparties who were themselves outside that market.
Two constraints, then: a time window, and a membership list. Neither is about capital controls in the usual sense of limiting how much money may cross a border. They are about who may stand in the market and make a price.
The two moves
The reforms ran in sequence and each addressed one of those constraints.
From January 2024, foreign financial institutions were allowed to participate in the Korean foreign exchange market. That dealt with the membership list.
From 1 July 2024, trading hours were extended from the old 9am to 3.30pm window to 2am the following day. The choice of 2am was not arbitrary: it was designed so that the extended hours fully cover those of the London market, one of the world's major financial centres. That dealt with the time window.
Taken together they change what kind of market it is. A currency quoted only during its own business day by its own institutions is, functionally, a domestic instrument that foreigners can obtain. A currency quoted across the London session by firms based anywhere is a traded international one.
Access runs through a register
The mechanism deserves attention because it is the part that generalises.
A Registered Foreign Institution is a financial institution located overseas that meets the eligibility requirements prescribed under the Foreign Exchange Transactions Act and is registered with the foreign exchange authorities to participate directly in Korea's market.
That is a deliberate middle path between a closed market and an unconditionally open one. Rather than removing the requirement to be authorised, the authorities created a category that a non-resident firm can enter by meeting published conditions. The market opens to anyone willing to be supervised, which is not the same as opening to everyone.
Korea's Ministry of Economy and Finance reported in its one-year review that fifty-two institutions had registered, that trading during the extended hours averaged around eighteen per cent of daily volume, and that spot volumes were higher than in the preceding year. Those figures describe that review period and will have moved since.
A minimum activity threshold for retaining a registration has since been set, which is the natural follow-on: a register whose members do not trade delivers the appearance of an open market rather than the substance.
Settlement is the unglamorous half
Extending trading hours creates a problem that has nothing to do with trading. If firms are dealing at one in the morning Seoul time, something has to settle those trades when the domestic banking day is over, and something has to supply the currency they are dealing in.
That is why an opening of this kind is never only a rule change. It requires arrangements for liquidity outside normal hours, reporting systems for the newly admitted participants to connect to, and a period in which those systems are built and tested. Korea's own follow-up measures included deferring a reporting obligation for registered institutions while they connected to the central bank's system, which is a mundane detail that says a great deal about how much of this work is plumbing.
Why any of it matters to somebody just converting money
Because price is made by whoever is allowed to make it.
A market open for six and a half hours a day to a closed group of firms will tend to carry wider spreads and less continuous pricing than one open across a major session to a larger set. That difference is not visible on a quote, but it is inside it. The purpose of the reforms, stated by the authorities, is to expand the market's scale and its appeal, and a deeper market is the thing that eventually shows up as a tighter price.
It is also a reminder that a currency's tradability is a policy variable rather than a fact of nature, and that at the far end of that scale some currencies have no offshore market at all. The won did not become easier to deal in because Korea's economy changed. It became easier because rules about access and hours were rewritten.
Where to look next
The AUD to KRW page carries the live reference rate and a short block on what kind of money the won is. For why two providers quote the same currency differently, why two currency converters disagree covers the mechanics.
Sources
- Ministry of Economy and Finance (Republic of Korea), The extension of FX market trading hours: progress over the past year and additional improvement measures - the previous 9am to 3.30pm trading hours, the admission of foreign financial institutions from January 2024, the extension to 2am from 1 July 2024 and its coverage of the London session, the definition of a Registered Foreign Institution under the Foreign Exchange Transactions Act, the fifty-two registrations, the share of volume traded in extended hours, the rise in spot volumes, the new minimum activity threshold, and the deferred reporting obligation
General information about how currency market access is regulated. Not financial advice, and not a recommendation of any product or institution. Reviewed by the Tradergy editorial team, September 2026.
Common questions
Why was the Korean won hard to trade?
Because the onshore market was closed to outsiders and open for only part of the day. Trading ran from 9am to 3.30pm Seoul time and only domestic institutions could participate, so anyone outside Korea dealt at second hand rather than in the market where the price was made.
What is a Registered Foreign Institution?
A financial institution located overseas that meets the eligibility requirements set out under Korea's Foreign Exchange Transactions Act and is registered with the authorities to participate directly in the Korean foreign exchange market. Registration is the mechanism by which the market was opened to non-residents.
When did Korea extend its trading hours?
From 1 July 2024, when the onshore dollar-won market's closing time moved from 3.30pm to 2am the following day. The extension was designed to cover the trading hours of the London market, which is one of the world's major financial centres.
Does opening a market mean removing all controls?
No. It means changing who is permitted to participate and when, which is a different question from whether capital may move freely. Korea's reforms addressed access to the onshore market and the infrastructure around it rather than abolishing its foreign exchange framework.
Why does market access affect what a conversion costs?
Because price is made by the participants who are allowed in. A market open for a limited number of hours to a limited set of firms tends to carry wider spreads and less continuous pricing than one that is open longer to more of them, whatever the size of the economy behind it.