South Korea’s Financial Services Commission (FSC) announced a joint decision by authorities to exempt securities firms from the 140% collateral maintenance requirement for margin loans for three months, starting Nov. 9. The measure aims to prevent excessive forced liquidation from amplifying market volatility following sharp declines in domestic and U.S. equities after the U.S. midterm elections. The waiver follows an Oct. 15 review at which the FSC called for preparations to deploy contingency measures amid external risks, including uncertainty over AI semiconductors. In the latest assessment, officials linked market declines to concerns over AI data center regulation and weaker global investor sentiment, judging that Korean stocks were reacting excessively to external factors. Authorities will strengthen monitoring of the global semiconductor industry and major economies’ policies, alongside real-time checks of stock markets and capital flows. Further stabilization measures will be prepared if volatility increases.
South Korea’s Financial Services Commission announces waiver of 140% margin loan collateral maintenance requirement for three months
South Korea’s Financial Services Commission announced that securities firms will be exempt from the 140% collateral maintenance requirement for margin loans for three months from Nov. 9. The relief aims to curb forced selling during sharp stock market declines following the U.S. midterm elections. Authorities will intensify monitoring and prepare additional stabilization measures if volatility worsens.