Securities Industry Takes Steps to Minimize Individual Investor Losses, Including Suspension of Forced Sales

[Asia Economy Reporter Oh Ju-yeon] As stock prices plummeted due to the novel coronavirus infection (COVID-19), the securities industry has taken steps to minimize the damage to individual investors.

On the 18th, the Korea Financial Investment Association stated, "Stock prices are sharply falling due to concerns over COVID-19 and the global economic recession," adding, "In response, each securities firm is making efforts to reduce forced liquidation, and the association is monitoring this."

According to the Financial Investment Association, some securities firms have postponed forced liquidation by 1 to 2 days upon customer request. Additionally, if customers fail to repay, a deadline was set to allow them to provide additional collateral.

Furthermore, some securities firms lowered the collateral maintenance ratio or reduced the discount rate on stock prices during forced liquidation to minimize the number of shares sold.

Forced liquidation refers to the disposal of stocks by a securities firm without the customer's consent when the customer borrows money from the firm to purchase stocks and fails to repay within the agreed period.

The Financial Services Commission announced market safety measures on the 13th, stating that the obligation to maintain the collateral ratio for credit loans will be exempted until September 15 of this year.

This content was produced with the assistance of AI translation services.