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Finance

Brokerage industry tightens margin loan controls, cuts investment bank credit limit to 90 percent of capital

South Korea\'s brokerage industry will strengthen self-regulation to reduce investor losses and forced selling risks tied to rising margin loans. The Korea Financial Investment Association and 10 investment banks will cap credit exposure, including margin loans, at 90 percent of equity capital from Oct. 1, below the legal limit of 100 percent. They also plan to raise the minimum margin requirement to 50 percent and tighten controls on excessive margin lending to specific stocks.

Finance

Online investment-linked finance gains momentum for mid-rate loans, expands base to sole proprietors

Online investment-linked finance platforms have expanded credit loans for mid- to low-credit borrowers through linked investments with savings banks and have now laid the groundwork to lend to sole proprietors after further regulatory changes. The measures raise caps on linked investments by financial firms and allow use of a small merchant credit scoring infrastructure. The Financial Services Commission also plans stronger disclosures and external verification to bolster investor protection.

Finance

Samsung and Meritz join, expanding bank debenture market

Competition in South Korea\'s bank debenture market is widening as Samsung Securities begins sales and Meritz Securities awaits final approval. Brokerages are offering high-yield promotional rates to attract customers while managing profitability as funding costs rise. The market totaled 55.93 trillion won at end-June, up 26.0 percent from a year earlier. Despite new entrants, the largest four firms still hold most balances, while rules on risk capital and real estate exposure are tightening.