Svmuu News: With the recent sustained rise in the South Korean stock market, the stock loan business of financial companies associated with online investment platforms has expanded rapidly, prompting financial regulators to step in and tighten controls, including setting the maximum stock loan limit per borrower at 1 billion won. Data released by the Financial Services Commission and the Financial Supervisory Service on August 15 showed that as of the end of June, the outstanding balance of stock loans in the online investment-related financial sector stood at 898.3 billion won, an increase of 374.5 billion won from the first half of the year. Compared to 351.3 billion won at the end of last year, this represents a 71.5% surge over the past six months.
In response, the Financial Supervisory Service will issue management targets to online investment financial companies, requiring that the monthly increase in stock loans not exceed 30% of the previous month’s increase in related loans. This new regulatory measure will take effect immediately on August 16. In addition, to prevent online investment finance companies from excessively concentrating their stock loan business and thereby accumulating risk, regulators have stipulated that, in principle, the maximum stock loan amount for a single borrower shall not exceed 1 billion won. However, companies may be exempted from this limit if they can keep their stock loan balances at the end of each month from July onward within the level recorded at the end of June. (Jinshi)