NH Investment & Securities to Ease Forced Sales Starting Nov. 9; Customer Consent Process Begins Tomorrow (Comprehensive)

NH Investment & Securities said on November 7 that it would ease the collateral maintenance ratio for margin loans starting November 9, in line with the government’s policy.

On November 6, the government said it would suspend for three months, starting November 9, the requirement to maintain collateral ratios for margin loans, in order to prevent excessive forced sales following a sharp drop in stock prices. Securities firms are currently required to maintain a collateral ratio of at least 140% for margin loan transactions. The temporary suspension is intended to prevent forced stock sales due to investors’ collateral shortfalls from worsening market volatility.

However, suspending the collateral maintenance requirement does not automatically halt all forced sales. Each securities firm will decide independently whether to lower its actual collateral ratio or delay the timing of forced sales. Investors using margin loans should check the applicable rules with their securities firm.

NH Investment & Securities will also implement the relevant measures starting November 9. In response to notices from some regional branches saying the measures would take effect on November 10 instead, NH Investment & Securities said, “It appears the notices were issued before the details were finalized, causing confusion,” adding, “NH Investment & Securities will also apply the measures starting November 9.”

Accordingly, NH Investment & Securities will lower the collateral maintenance ratio used as the threshold for forced sales from 140% to 130%.

To implement the change, NH Investment & Securities plans to obtain customers’ consent starting November 8. A company representative said, “In the past, when forced sales were suspended across the board during a market crash, we received many complaints from customers who said their losses had grown even larger.” The representative added, “To implement the measures on November 9, we plan to begin obtaining customers’ consent via text messages and other means starting November 8, despite the holiday.”

According to the financial investment industry, Mirae Asset Securities will lower the collateral ratio for margin loans on domestic stocks from 140% to 130% starting November 9. The ratio for overseas stocks will remain at 140%, but if an investor has both margin loans on domestic stocks and loans secured by overseas stocks, the collateral ratio will be calculated within a range of 130% to 140%. The measures will remain in effect through January 31, 2027.

Korea Investment & Securities will operate a three-month deferral program for customers subject to forced sales on either the same day or the following day. Customers subject to forced sales can apply for a deferral through a branch or the customer service center. A deferral is valid only on a business day. Customers with a collateral ratio of 120% to 130% may receive a deferral once, while those with a ratio of 130% to 140% may receive one by submitting a new application each day. Kiwoom Securities will grant a one-day deferral, upon application, for accounts with a collateral ratio of at least 130% but below 140% at market close that are subject to forced sales on either the same day or the following day.

Samsung Securities will apply a collateral ratio 10 percentage points below the current level for November 9 only, and plans to establish a separate application system thereafter.

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