South Korea plans to allow overseas financial firms to participate in the local foreign exchange market in the fourth quarter, the finance ministry said Wednesday, in the latest move to meet "global standards."

Under the measure, the country will allow foreign institutions that obtain registration from the South Korean government to participate in the South Korean foreign exchange market, according to the Ministry of Economy and Finance.

Currently, foreign institutions can only participate in the local foreign exchange market by opening a branch here or through other South Korean banks.

Hedge funds, however, are not eligible to gain the status of registered foreign institutions.

The new measure, which is subject to Cabinet approval, is planned to be implemented in the fourth quarter of 2023.

South Korea has been making efforts to lift regulations and invite more foreign participants to the local foreign exchange market in line with efforts to attract more investment from overseas.

The country also plans to extend the operating hours of its foreign exchange market, which currently runs for 6 1/2 hours (9 a.m. to 3:30 p.m.), to 17 hours, with it closing at 2 a.m. the following day, as early as the second half of 2024. (Yonhap)