In the future, foreign currency exchange for overseas travel, studying abroad, and business trips is expected to be possible directly from a securities account. This means that foreign currency cash can now be withdrawn directly from a securities account through a bank automated teller machine (ATM), even without a bank account.
This is thanks to the government's preparation of regulations that enable partnerships between securities firms and banks to support the 'general exchange' operations in the securities industry. It is expected to promote competition in the foreign exchange market, reduce exchange fees, and ultimately increase the benefits for financial consumers.
According to the government on the 16th, the Ministry of Strategy and Finance has publicly announced a partial amendment to the 'Foreign Exchange Transaction Regulations' on the 13th. The amendment includes provisions allowing 'securities firms to conduct general exchange operations for customers through resident accounts in their own name.'
'General exchange' refers to the exchange for personal travel, studying abroad, or corporate import and export purposes. Previously, exchanges through securities firms were only possible for investment purposes via mobile trading systems (MTS).
In July 2023, the Ministry of Strategy and Finance revised the foreign exchange transaction regulations to allow comprehensive financial investment firms with a capital of over 3 trillion won to conduct general exchange operations for 'individual and corporate customers' alike. However, there has been no explicit regulation regarding the foreign currency accounts used for these general exchange operations, making it difficult for securities firms to prepare for such operations.
However, last August, the Ministry of Strategy and Finance issued a legal interpretation stating that 'a resident account in the name of the securities firm can be used for general exchanges.' This revision has formalized that regulation.
Additionally, the amendment includes provisions stating that 'individuals without a foreign currency account in their own name at a bank can also receive foreign currency cash through securities general exchanges.' Until now, only bank customers could apply for exchanges through apps and select the pickup location at the branch counter or foreign currency ATM to receive cash. Previously, cash could only be withdrawn from a domestic foreign exchange bank account in the individual's name, but now it will be possible to withdraw cash directly from the securities account.
A Ministry of Strategy and Finance official explained, 'Securities firms have established a 'trust basis' to enable customers to withdraw foreign currency cash from bank ATMs in partnership with banks.' It is reported that securities firms have been exploring methods to withdraw foreign currency cash using ATMs or counters of partnered banks.
However, to carry out general exchange operations, securities firms must receive approval from the Ministry of Strategy and Finance. So far, only three firms have received licenses: Kiwoom Securities, Shinhan Investment Corp., and Samsung Securities. Kiwoom Securities and Shinhan Investment Corp. received their licenses in July and September of last year, respectively, while Samsung Securities obtained theirs on the 14th. These securities firms have not yet launched their general exchange services.
A Ministry of Strategy and Finance official remarked, 'Since general exchanges through securities firms were only possible via MTS, which sends funds to an account, we anticipated it would cause inconvenience for consumers' and added, 'This revision will make it easier for securities customers to conduct foreign currency exchanges.' They further explained, 'As the scope of foreign exchange operations by securities firms expands, it is expected to play a role in further reducing exchange fees in the foreign exchange market.'