Korea tightens online stock loans, capping individual borrowers at 1 billion won

Odaily Planet Daily News: As the Korean stock market continues to rise recently, the stock loan business of online investment-related financial companies has expanded rapidly, prompting financial regulators to strengthen control. Measures include capping the stock loan limit for a single borrower at 1 billion won. Data released by the Financial Services Commission and the Financial Supervisory Service on August 15 shows that as of the end of June, the stock loan balance of the online investment-related financial industry 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, it surged by 71.5% within six months.

In response, the Financial Supervisory Service will issue management targets to online investment finance companies, requiring that the scale of new monthly stock loans must not exceed 30% of the scale of new related loans from the previous month. This new management measure will take effect immediately from August 16. Additionally, to prevent excessive concentration of stock loan business by online investment finance companies leading to risk accumulation, regulators stipulate that the stock loan limit for a single borrower should, in principle, not exceed 1 billion won. However, if a company can keep its month-end stock loan balance from July onwards within the level of the end-of-June balance, it may be exempted. (Jin Shi)