Kiwoom and Kyobo Securities Temporarily Suspend CFD Account Openings "Focusing on Risk Management"

Kiwoom Securities, caught in a crisis due to the Soci?t? G?n?rale (SG) Securities-induced crash, and Kyobo Securities, the No. 1 player in the Contract for Difference (CFD) market, announced on the 8th that they will temporarily suspend the opening of CFD accounts. CFDs have been identified as one of the causes that triggered the recent SG Securities-induced stock price crash. As a result, Kiwoom Securities, which was directly hit by the stock price crash, and Kyobo Securities, the top player in the domestic CFD market, are understood to have taken measures for risk management.

Kiwoom Securities has temporarily suspended the opening of domestic and overseas stock CFD accounts for customers starting from this day. Existing CFD account holders can trade normally, but new sign-ups are blocked. Initially, Kiwoom Securities maintained the position that there was no problem with CFDs themselves even after large-scale stock manipulation suspicions surfaced following the SG Securities-induced crash.

Hwang Hyun-soon, CEO of Kiwoom Securities, said to reporters after a meeting with the Financial Supervisory Service and securities CEOs on the 28th of last month, "It was the stock manipulation groups that used CFDs, not the CFDs themselves that are problematic," and added, "Risk management for CFDs needs to be strengthened." However, as owner risks such as allegations of unfair trading involving Kim Ik-rae, chairman of Daou Kiwoom Group, emerged, leading to inspections by financial authorities and the burden of large-scale unpaid receivables, it is understood that they ultimately decided to suspend the opening of CFD accounts.

Kyobo Securities, which introduced CFDs to Korea for the first time, has not accepted new non-face-to-face CFD account openings for domestic and overseas stocks since the 4th of this month. All related events have also been terminated early. A Kyobo Securities official said, "We do not have many unpaid receivables as we do not have a contract with SG Securities, but we decided to suspend new account openings as part of overall risk management."

Following the announcements by Samsung Securities, Korea Investment & Securities, and Shinhan Investment Corp. to suspend CFD subscriptions, the suspension of new subscriptions by Kyobo Securities and Kiwoom Securities, which compete for first and second place in CFD balances, is expected to spread throughout the industry.

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