South Korea's Ministry of Economy and Finance reviewed its draft roadmap for moving securities settlement to one business day after trading, or T+1, at the third Global Key Investor Consultative Group meeting on Nov. 10. Discussions focused on operational readiness before the transition and improving foreign investors' access to won funding and settlement. The ministry also reported the first domestic investment using the pilot offshore won settlement system.
The draft roadmap, published Nov. 3, provides for automated trading and settlement information infrastructure and sufficient preparation time for domestic and overseas market participants to adapt their systems and processes. At least six months of integrated testing will precede the transition, with implementation following an assessment of market readiness. Investors raised concerns about heavier processing workloads and called for further work on arrangements to handle settlement failures. Improved won funding conditions were also identified as a prerequisite for shorter settlement.
The first investment through the offshore won settlement pilot took place in late October. A Singapore financial investment firm opened a won account with a locally registered overseas won business institution, converted local currency and transferred funds through the Bank of Korea's international settlement network to invest in Korean financial products. The network is scheduled to begin full operation in January 2027. Separately, rules effective Nov. 2 raised the annual threshold requiring prior notification to the ministry for overseas won borrowing by Korean subsidiaries of foreign securities firms from KRW 1 billion to KRW 50 billion. Korean branches of foreign securities firms were also permitted to borrow won and foreign currency overseas on the same basis as subsidiaries.