The won is opening up faster as South Korea's foreign exchange market moves to 24-hour trading, but the won-dollar spot brokerage market has been split between just two firms for more than 20 years. The domestic foreign exchange market has long been structured around interbank trades routed through brokers, and those brokers have helped form and stabilize the market. Further opening is seen as inevitable, but some argue the shift should proceed in stages, taking into account the role of the existing brokerage infrastructure and market stability, rather than rushing to widen competition alone.
According to materials the Bank of Korea submitted to the office of Rep. Kim Nam-joon of the Democratic Party of Korea, a member of the National Assembly's Finance and Economy Planning Committee, only two foreign exchange brokerages were licensed to broker won-dollar spot trades as of the end of September 2026: Korea Money Brokerage Corporation and Seoul Foreign Exchange Brokerage. Korea Money Brokerage was licensed in November 1998 and Seoul Foreign Exchange Brokerage in August 2000. In effect, the two companies have divided the won-dollar spot brokerage market for more than two decades.
Authority to license foreign exchange brokerage business rests with the minister of economy and finance. The Bank of Korea declined to detail any plans on expanding entry for new operators in the spot brokerage market, citing the fact that licensing authority lies with the Ministry of Economy and Finance. The ministry said no company has applied for a new license to broker interbank spot trades from 2021 through this year, and none is currently under review.
Still, there are signs within and around the central bank that the brokerage infrastructure also warrants a look as the won market improves access and ease of trading through steps such as 24-hour foreign exchange trading. The argument is that the more market opening improves access to the won market for financial institutions at home and abroad, the more the question of brokerage infrastructure — long given little attention — could come to the fore.
The entire foreign exchange brokerage market is not limited to the two domestic firms. Some products, such as foreign exchange swaps, have a brokerage structure different from spot trades, and overseas brokers already participate in the domestic market. In the spot market as well, overseas brokers could have greater incentive to enter if trading volume grows and market access improves.
Entering the spot brokerage business requires meeting certain conditions. Under the current Foreign Exchange Transactions Act, conducting foreign exchange brokerage business in South Korea requires a license from the minister of economy and finance. A general foreign exchange broker seeking to broker trades in foreign currencies must have paid-in capital of at least 5 billion won (about $3.6 million), the relevant computer systems and at least two specialized staff. For foreign corporations, the standard is based on the operating funds of their domestic branch or business office.
Compared with major economies, South Korea's brokerage market structure relies relatively heavily on brokers. According to 2023 data from the International Monetary Fund (IMF), financial institutions in Japan and Australia can trade directly with one another, and in Australia spot transactions take place through multiple channels, including electronic brokerage platforms. In South Korea, by contrast, most interbank trades go through brokers, and conducting foreign exchange brokerage business requires a license from the authorities.
Some, however, say caution is needed on the pace of opening, given how large a role brokers have played in the domestic foreign exchange market. One foreign exchange market official said there have been cases, such as Japan and Australia, where the influence of overseas brokers grew after the market opened. Because domestic brokers have contributed to market stability and development, the official said, market opening needs a soft landing that lets existing firms adapt to the changes, rather than abrupt competition.
