South Korea will waive, for three months, the requirement that securities firms maintain a 140% collateral ratio on margin loans, aiming to limit volatility from forced selling.
The Ministry of Finance and Economy (MOFE) said the exemption follows a meeting convened by Deputy Prime Minister and Minister of Finance and Economy Lee Hyoung Il. Participants judged that markets had reacted too strongly to external developments and called for steps to prevent further instability.
Participants pointed to unresolved artificial intelligence policy questions, possible regulation of data centers and weaker global investor sentiment. The ministry said authorities would watch semiconductor developments, policy decisions in major economies, markets and capital flows. Officials may consider additional stabilization measures if volatility increases.
Earlier in the week, Nov. 4 opening gains put Samsung Electronics up 3.6% and SK Hynix up 4.8%, compared with a 2.43% rise in the Korea Composite Stock Price Index (KOSPI). The three-month waiver is scheduled to begin Nov. 9.
