SEOUL, March 25 Reuters South Korea is seeking to boost the global profile of its financial markets, which would also mean loosening some of the tight restrictions on the way its currency, the won, is traded.

Here are details about the how the won currently trades and what regulators plan to do to ease some existing restrictions

HOW THE WON TRADES

As recently as last year, the won could only be directly exchanged with the dollar in the local interbank market or the Chinese yuan wonyuan transactions could only take place in Seoul or Shanghai.

Only a total of 56 financial institutions based in the country could participate in dollarwon spot trading for just sixandahalf hours a day, through the two governmentregistered brokers Seoul Money Brokerage Services and Korea Money Brokerage Corp.

Currently, outside the onshore trading hours of 0900 to 1550, foreign investors rely on derivatives contracts known as nondeliverable forwards to manage their won exposure, a more costly option.

CHANGES IN THE WORKS

From July this year, the close for onshore dollarwon trading hours and FX swap markets will be extended to 0200 to cover London business hours.

For the first time, foreign banks are allowed to participate as long as they register themselves and follow regulatory obligations imposed on the Registered Financial Institutions RFIs.

RESTRICTIONS ON FOREIGN BANKS

The registered foreign banks can participate in dollarwon spot, forward and swap trading but they must do this…