24-Hour FX Market to Operate Non-Stop from Monday 6 a.m. to Saturday 6 a.m.

FX Council General Meeting Revises Seoul FX Market Code of Conduct
Won-Dollar Trading Allowed on All Days Except Weekends and January 1

Starting from July 6, the trading hours for the won-dollar foreign exchange market via brokerages will shift to a 24-hour non-stop system. The current trading window, which runs from 9 a.m. to 2 a.m. the following day, will be changed to operate from 6 a.m. on Monday to 6 a.m. on Saturday. During periods outside New York Daylight Saving Time, trading will be available from 7 a.m. on Monday to 7 a.m. on Saturday. As a result, won-dollar trading will be possible on all days except weekends and January 1.

On the 29th of last month, employees were working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. Photo by Yonhap News Agency

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The Seoul Foreign Exchange Market Operation Council (FX Council) announced on May 31 that it held a general meeting on the 29th and revised the ‘Seoul Foreign Exchange Market Code of Conduct,’ deciding on changes to key matters related to the foreign exchange market, including won–dollar trading hours and trading days.

With this move to a non-stop intraday system, won–dollar trading will be possible on all days, including Korean public holidays, except weekends and January 1. The first trading day of each year will open at 9 a.m., and the last trading day will close at 24:00. However, trading hours for the won and other foreign currencies will remain unchanged, from 9 a.m. to 3:30 p.m.

The FX Council stated that this measure is expected to eliminate gaps in foreign exchange trading hours, enhance convenience for domestic and international investors and import/export companies when exchanging currency, and reduce transaction costs. An official from the council explained, “Foreign investors in different time zones, domestic investors trading overseas stocks, and import/export companies will be able to conduct won-dollar foreign exchange transactions at their preferred times and manage exchange rate risks at lower transaction costs.”

The FX Council decided that while won-dollar trading will be freely available even on Korean public holidays, settlement (the transfer of funds between parties) will be processed on banks’ business days in line with general market practice. For other currencies and for Korean stocks and bonds, settlement will not take place on bank holidays, and will instead be deferred to the next available bank business day.

With the launch of 24-hour trading in the won-dollar foreign exchange market, a time-weighted average price (TWAP) will be provided on the hour, every hour, from 6 a.m. to 6 a.m. the next day. The TWAP is calculated by taking a simple average of prices (exchange rates) near the calculation time at each spot FX brokerage. The opening, high, and low exchange rates will be provided based on the 6 a.m. to 6 a.m. window, while the current 3:30 p.m. closing rate and the market average rate (MAR) will remain unchanged for the time being. The foreign exchange authorities also plan to use these standards for providing exchange rate information in statistics and press releases for now.

At this general meeting, the FX Council also discussed changing the method for calculating the market average rate to align with the 24-hour trading system and global practices, as well as the need to apply a suitable grace period to minimize market confusion regarding the change. The foreign exchange authorities plan to revise relevant foreign exchange transaction regulations, including the change to the market average rate, by collecting feedback from market participants through the latest FX Council meeting by June.

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