[DigitalToday reporter Sangyup Oh (오상엽)] NH Investment & Securities, which resumed margin trading on March 10, again temporarily halted margin trading on March 12 after its credit-provision limit was used up.

NH Investment & Securities said on March 12 it would temporarily suspend new purchases using margin-trading loans due to exhaustion of its credit-provision limit. Margin-trading loans will be suspended from that day until further notice, while short sales through stock borrowing and lending remain possible.

NH Investment & Securities explained it was an unavoidable situation to comply with credit-provision limits under the Capital Markets Act.

Under the Act on Capital Markets and Financial Investment Business, when an integrated financial investment business operator provides credit, the total amount of credit provision must not exceed 100 percent of its equity capital.

NH Investment & Securities had also suspended margin trading on March 5 after reaching the limit, then resumed the service on March 10. It reached the limit again in two days as pent-up loan demand surged.

According to the Korea Financial Investment Association, outstanding margin-trading loans in the domestic stock market recently hit 3.28 quadrillion won, setting a record high.

The main reason is that as the KOSPI has recently shown strength, the volume of investors borrowing funds to buy stocks has increased sharply.

As large brokerages successively suspend or scale back margin-trading loan services, there is analysis that the suspension of lending could spread across the securities industry.