“Open a won account overseas to invest in South Korea”... Woori Bank takes first step in offshore won transactions

[Financial News] Woori Bank has completed the banking sector’s first won-denominated transaction to facilitate investment in South Korea by an overseas investment institution. The institution opened a won account at Woori Bank’s Singapore branch and sent won to a South Korean securities firm to invest. This is the first case in which the government’s push to liberalize offshore won transactions has led to an actual transaction.
According to financial industry sources on the 2nd, Woori Bank completed a transaction on the 29th of last month in which it opened a won account for an overseas investment institution at its Singapore branch and remitted won to a South Korean securities firm for investment. 
The liberalization of offshore won transactions, a key task in the “Won Internationalization Roadmap” announced by the government in July, has for the first time led to an actual transaction in the banking sector. The transaction proceeded without a separate advance declaration of a capital transaction, following the foreign exchange authorities’ easing of regulations.
The transaction means overseas investors no longer have to go to the trouble of opening a separate account at a South Korean bank or instructing remittances to coincide with South Korean business hours. With the introduction of the Registered Foreign Institution for Won transactions (RFI-K) system and the Bank of Korea’s Won International Settlement Network, which operates 24 hours a day except on weekends and public holidays, they can settle won during local business hours.
Woori Bank’s Singapore branch, as an RFI-K, helps foreign investors pay and receive, hold, raise and manage won without maintaining a separate account at a South Korean financial institution. When an investor opens a won account with an RFI-K, that institution opens an integrated won account with an institution participating in the Bank of Korea’s Won International Settlement Network and handles settlement on the customer’s behalf. Last September, Woori Bank registered four entities as RFI-Ks and received approval: its Singapore, Tokyo and London branches, and its China entity.  
Woori Bank plans to use this first transaction as an opportunity to inform local institutions in major financial markets in Asia and Europe how to use the Won International Settlement Network, and to expand won transactions in line with business hours in each region. Going forward, it aims to make won transactions more convenient for foreign investors through its overseas network and to play its part in the internationalization of the won. 

[email protected] Lee Hyun-jung Reporter