Korea has begun the registration process for offshore financial firms to trade on the domestic foreign exchange market Wednesday, as part of the move to open up the local financial market.

Registered foreign institutions, or RFIs, will be able to participate in dollar-won spot exchanges, forex swap exchanges and more from January, according to the revised Enforcement Decree of the Foreign Exchange Transaction Act implemented from Oct. 4.

Offshore firms, including global banks and brokerage houses, that wish to participate in the local forex market can register for approvals from Wednesday, the Finance Ministry and Bank of Korea said.

Some 30 offshore firms have expressed a willingness to participate in the domestic forex market in a survey that polled major global financial firms from Sept. 26 to Oct. 11, the government and central bank said.

Forex authorities are to support international firms to register for approvals through holding outreach presentations and more, the Finance Ministry said.

Currently, only 54 certified local financial firms and overseas firms with a branch here, are allowed to trade in the interbank forex market.

The RFIs will participate in domestic forex trading through a trial run in the first half of next year, before it kicks off in full swing in July 2024. The operating hours of the domestic forex market will also be extended then. The foreign exchange trading hours will be lengthened from the current 9 a.m. to 3:30 p.m. to 9 a.m. to 2 a.m.

Prior to the change, forex authorities are to run trial tests, designating specific days for longer trading hours, for instance, operating the market from 9 a.m. to 9 p.m. or 9 a.m. to 2 a.m. to test the proposed changes.

Authorities are looking into opening the market for 24 hours in the future, so the trading hours can overlap with the London finance market.

The changes come as part of a move to improve the accessibility of the domestic forex market, one of the major reasons Korea missed out on the upgrade for the Morgan Stanley Capital International index in June. The MSCI global stock index provider pointed out that Korea's forex market lacks accessibility.

Along with the policy changes, the Finance Ministry is to make further improvements on the infrastructure of the forex market and related regulations as well. The government will look through amendment proposals and confirm the agenda items for improvement through a November meeting.

"We will work to have the reforms successfully settle down, making the local forex market meet global standards and form a competitive market structure, which will lead to improvements for foreign exchange services and more," the Finance Ministry said.