(Bloomberg) -- South Korea is considering scrapping regulations that require the presence of humans for algorithm-based trading of its currency.
Financial institutions in South Korea are required to have a dealer supervise the so-called eFX trading platform to trade the won, even when they are running trades based on algorithms.
If implemented, the change would help increase trading via computer algorithms during nighttime when there are usually no staff present, You Chang-yeon, director of international finance at the finance ministry, said on Friday.
“There have been requests to allow algorithm trading without human dealers,” You told a briefing, where the government discussed plans to further boost reforms following FTSE Russell’s decision to include the nation’s bonds to its main index this month.
The ministry will make a decision before the end of this year, and the strength of the risk management frameworks of financial institutions would be a key factor, You said.
Beneficiaries would range from foreign investment banks with offices in Seoul to South Korean export companies in need of currency trading at night to make transactions with their overseas branches. The ministry, in a separate statement, reiterated its intent to extend the won trading hours around the clock, without giving a time frame.
South Korea earlier this year extended the onshore trading hours for the won to 2 a.m. local time from 3:30 p.m. The volume of trades in the South Korean won in extended hours almost doubled since August.
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--With assistance from Catherine Bosley.
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