Kyobo Securities, Grace Period for Forced Sales Related to Market Stabilization Measures

[Asia Economy Reporter Park Hyungsoo] Kyobo Securities announced on the 4th a plan to ease forced liquidation for its customers.

For accounts applying a collateral ratio of 140%, accounts with a forced liquidation ratio of 120~130% the next day will be granted a one-day grace period for forced liquidation once.

According to financial investment industry regulations, securities firms must secure collateral of at least 140% when providing margin loans to investors and maintain the collateral ratio specified in their internal rules. Recently, as the number of stocks experiencing sharp price declines has increased, the number of accounts with collateral ratios falling below 140% has also risen.

To mitigate stock market volatility, financial authorities have temporarily relaxed regulations for the next three months, allowing securities firms not to forcibly liquidate stocks through forced sales even if the collateral maintenance ratio falls below 140%. By easing the obligation to maintain the margin loan collateral ratio, securities firms can flexibly determine the collateral maintenance ratio considering market conditions.

Kyobo Securities decided to postpone the forced liquidation date by one day for some accounts subject to forced liquidation. However, Kyobo Securities explained that customers eligible for this must apply at their trading branch for the measure to be applied.

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