Temporary Exemption from the 140% Margin Loan Collateral Requirement: Forced Liquidation Rules by Securities Firm
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Although the requirement to maintain a 140% collateral ratio for margin loans has been temporarily waived, this does not mean that the maintenance ratio for every investor’s account will automatically be lowered to 130%. Nor does it mean that all forced liquidations will be suspended.
The regulatory exemption period runs from November 9, 2026, through January 31, 2027. During this period, securities firms can determine their collateral maintenance ratios flexibly, taking into account borrowers’ circumstances and market conditions.
The key distinction is between the exemption period established by financial regulators and the collateral maintenance ratios and forced-liquidation deferral conditions actually applied by individual securities firms. Some firms are lowering their maintenance ratios, while others are offering deferrals that require customers to apply separately.
This measure does not eliminate the risk of losses from margin trading, nor is it intended to encourage investors to trade on credit. The following sections distinguish the official policy announcement, the operating conditions of individual securities firms, and a numerical comparison using a hypothetical account.
📋 1. What Has Changed Under the 140% Collateral Maintenance Requirement?
A margin loan allows an investor to borrow money from a securities firm to purchase stocks. Because the transaction involves borrowed funds, the relationship between the value of assets recognized as collateral and the outstanding loan amount is important.
Under the existing collateral requirements in Article 4-25, Paragraph 3 of the Regulations on Financial Investment Business, securities firms must secure collateral of at least 140% when providing margin loans and require additional collateral if the collateral ratio falls below the maintenance ratio set by the firm.
If a decline in stock prices or other factors causes a collateral shortfall and the investor fails to meet the applicable requirements, forced liquidation may occur. This means that stocks or other holdings may be sold without a separate sell order from the investor.
When the number of accounts with collateral shortfalls increases simultaneously, forced-liquidation orders can become concentrated. This measure was introduced in response to concerns that such situations could further amplify market volatility.
Following an emergency market conditions review meeting on November 6, 2026, financial regulators announced a temporary exemption from the collateral maintenance requirement applicable to securities firms’ credit extensions.
The regulatory relief is implemented through a no-action letter issued by the Financial Supervisory Service (FSS). This approach allows securities firms to determine their collateral maintenance ratios flexibly during the exemption period, taking into account borrowers’ circumstances and market conditions.
What is waived here is the collateral maintenance requirement imposed on securities firms. Investors’ collateral obligations themselves are not eliminated.
Furthermore, a securities firm’s ability to operate under more flexible requirements is different from the actual application of a revised maintenance ratio to a particular account.
Therefore, the announcement of an exemption from the 140% requirement does not mean that every securities firm applies a 130% ratio or that forced liquidations have been suspended across the board.
🗓️ 2. Regulatory Exemption Period vs. Securities Firms’ Operating Periods
The exemption period announced by financial regulators must be distinguished from the operating period adopted by each securities firm.
| Category | Period | Meaning |
|---|---|---|
| Emergency market conditions review meeting | November 6, 2026 | Discussion of measures to address market volatility |
| Regulatory exemption period | November 9, 2026 – January 31, 2027 | Securities firms are permitted to determine collateral maintenance ratios flexibly |
| KB Securities’ temporary adjustment | November 9, 2026, until further notice, based on the forced-liquidation date | A 130% collateral maintenance ratio applies to the products covered by the notice |
| Operating periods at other securities firms | As specified in each firm’s notice | Eligible accounts and deferral conditions may differ |
The end date of the regulatory exemption is not necessarily a common end date for the periods during which individual securities firms actually apply relaxed requirements.
KB Securities stated that its adjustment would apply from November 9 until further notice, based on the forced-liquidation date. Its notice also states that operating arrangements may change depending on market conditions and that further announcements will be made if changes occur.
It would therefore be incorrect to assume that identical ratios and deferral conditions will remain in effect for every account through January 31, 2027.
The regulatory exemption period is based on the financial authorities’ announcement, while securities firms determine the actual applicable requirements and termination conditions.
🏦 3. Requirements Announced by Major Securities Firms
As of November 10, 2026, the major measures identified fall into two broad categories.
Lowering the collateral maintenance ratio means reducing the minimum ratio that must be maintained under specified conditions. By contrast, deferring forced liquidation means temporarily postponing forced-liquidation procedures for customers who meet the relevant requirements.
These measures operate differently and do not guarantee the same outcome.
| Securities Firm | Type of Measure | Collateral Maintenance Ratio | Key Conditions |
|---|---|---|---|
| KB Securities | Lower maintenance ratio | 140% → 130% | From November 9 until further notice. Certain loan products excluded |
| Mirae Asset Securities | Lower maintenance ratio | 140% → 130% | Domestic stock margin loans and securities-backed loans. The existing 160% ratio remains for stocks designated as administrative issues and stocks undergoing liquidation trading |
| Korea Investment & Securities | Forced-liquidation deferral | Cannot be interpreted as a uniform reduction | Temporary deferral for customers who apply separately |
| Kiwoom Securities | Forced-liquidation deferral | Cannot be interpreted as a uniform reduction | Temporary deferral for customers who apply separately |
① KB Securities — Collateral Maintenance Ratio Lowered from 140% to 130%
In a notice posted on November 6, 2026, KB Securities announced a temporary reduction in the collateral maintenance ratio for credit and loan transactions from the previous 140% to 130%.
The adjustment applies from November 9, 2026, until further notice, based on the forced-liquidation date.
An important point is how procedures other than the collateral maintenance ratio are handled. KB Securities explicitly stated that the standards for calculating collateral shortfalls and the procedures for forced liquidation remain unchanged.
In other words, a lower maintenance ratio does not mean that the entire process for calculating collateral shortfalls or executing forced liquidations has changed.
Overseas stock loans and CMA revolving collateral loans, which allow deposits and withdrawals on demand, are excluded from this adjustment to the collateral maintenance ratio.
Once the adjustment period ends, the collateral maintenance ratio will return to 140%, and a collateral shortfall may arise. This is a conditional risk that depends on the account’s collateral position at the time the temporary measure ends.
② Mirae Asset Securities — 130% for Domestic Stock Margin Loans and Securities-Backed Loans
The measure announced by Mirae Asset Securities is a reduction in the collateral maintenance ratio for domestic stock margin loans and securities-backed loans from 140% to 130%, effective November 9, 2026.
However, an exception applies to stocks designated as administrative issues and stocks undergoing liquidation trading, for which the existing 160% ratio remains in effect.
Therefore, it would be incorrect to assume that the same 130% requirement applies to all stocks involved in credit or loan transactions at the firm.
③ Korea Investment & Securities and Kiwoom Securities — Temporary Deferrals for Applicants
Korea Investment & Securities and Kiwoom Securities announced measures to temporarily defer forced liquidation arising from collateral shortfalls in credit and loan transactions.
These measures apply to customers who submit a separate application. Therefore, the regulatory announcement alone does not mean that forced liquidation is automatically deferred for every account.
This approach is different from lowering the collateral maintenance ratio itself. It postpones forced-liquidation procedures when specified requirements are met, but it does not eliminate collateral shortfalls or the risk of losses associated with borrowed funds.
The application requirements and processing procedures of the two firms should not be assumed to be identical. Details such as collateral ratio ranges, the number of permitted deferrals, and processing dates are governed by each firm’s official conditions.
As a result, even accounts involving the same type of margin trading may face different outcomes depending on the securities firm and whether the account qualifies for the measure.
🧮 4. How Does a Lower Ratio Change the Threshold for a Collateral Shortfall?
A hypothetical account illustrates the difference when the collateral maintenance ratio is lowered from 140% to 130%.
Hypothetical example: Assume an account has a collateral ratio of 135%. This figure is used solely for illustration and does not represent an actual investor account or a trading outcome at any particular securities firm.
| Comparison Item | Ratio | Simple Comparison |
|---|---|---|
| Hypothetical account’s collateral ratio | 135% | Assumed value for comparison |
| Previous maintenance ratio | 140% | Below the maintenance requirement |
| Reduced maintenance ratio | 130% | At or above the maintenance requirement |
Assuming all other conditions remain the same, an account with a collateral ratio of 135% falls below a 140% maintenance requirement but meets a 130% maintenance requirement.
In this way, lowering the maintenance ratio can change the threshold used to determine whether an account has a collateral shortfall.
However, this comparison alone cannot establish whether forced liquidation will occur or when it might take place. Actual procedures depend on the securities firm’s collateral valuation, account conditions, securities held, additional collateral requirements, and the timing of application.
In particular, deferring forced liquidation is a different measure from simply changing the numerical maintenance ratio. Where a deferral application is required, the result depends on whether the account meets the specified eligibility requirements.
The exemption from the 140% requirement, application of a 130% maintenance ratio, and deferral of forced liquidation are related policy measures, but they do not mean the same thing.
⚠️ 5. What Happens After the Temporary Measure Ends?
For a temporary measure, the termination conditions are just as important as the start date.
Even if an account meets a reduced collateral maintenance ratio during the adjustment period, its collateral shortfall status may change when the previous requirement is reinstated after the period ends.
KB Securities explicitly addresses this issue in its official notice. When the temporary adjustment ends, the 140% requirement will apply again, potentially resulting in a collateral shortfall.
For example, if nothing else changes in the hypothetical account with a 135% collateral ratio described earlier, it meets a 130% maintenance requirement but falls below a 140% requirement.
This illustrates the arithmetic effect of a change in the maintenance requirement. It does not mean that forced liquidation will necessarily occur on the termination date.
Furthermore, if a securities firm sets its operating period through a separate notice, the regulatory exemption period alone cannot determine when that firm’s temporary adjustment will end.
This is why a temporary maintenance ratio should not be treated as a permanent loan condition.
Even while regulatory relief is in effect, the risks of declining collateral values due to falling stock prices, additional collateral obligations, margin-trading losses, and forced liquidation remain.
📚 6. Similar Measures in 2020 and 2022
This is not the first time financial regulators have temporarily waived the collateral maintenance requirement for margin loans.
In March 2020, a similar measure was introduced in response to stock market volatility, and the temporary exemption operated for about six months.
In 2022, the Financial Services Commission (FSC) again introduced an exemption from securities firms’ margin-loan collateral maintenance requirement through measures announced on July 1 following a joint financial market review meeting.
The announced application period at that time ran from July 4 through September 30, 2022, with a provision allowing an extension if necessary.
The 2022 announcement also described an approach using a no-action letter from the Financial Supervisory Service, allowing securities firms to determine collateral maintenance ratios flexibly based on borrowers’ circumstances and market conditions.
The common purpose of these three measures was to ease the burden of forced liquidations arising from sharp market declines and mitigate the risk of amplified market volatility.
However, the deferral conditions and operating procedures adopted by individual securities firms in earlier periods do not necessarily apply unchanged to the 2026 measure.
Even when the policy objective is the same, maintenance ratios, eligible accounts, application procedures, and termination conditions may differ according to each firm’s notice.
✅ 7. Summary
The temporary exemption from the collateral maintenance requirement for credit extensions, which took effect on November 9, 2026, allows securities firms to operate their collateral maintenance ratios flexibly in response to market conditions.
Although the regulatory exemption period runs through January 31, 2027, the actual operating periods and account-specific conditions adopted by securities firms do not necessarily coincide with that period.
KB Securities lowered its collateral maintenance ratio from 140% to 130% while excluding certain loan products. Mirae Asset Securities has announced a reduction for domestic stock margin loans and securities-backed loans, with the existing 160% requirement remaining applicable to certain stocks.
The temporary forced-liquidation deferrals offered by Korea Investment & Securities and Kiwoom Securities require separate applications and must therefore be distinguished from reductions in collateral maintenance ratios.
The essential point is that the exemption from the 140% maintenance requirement does not mean an automatic reduction in every account’s collateral maintenance ratio or a complete suspension of forced liquidations.
This measure is a temporary regulatory relaxation intended to address sharp market fluctuations. It does not eliminate the risk of losses from margin trading or the possibility of forced liquidation.
🔗 Further Reading
- Financial Supervisory Service — Implementation of the Exemption from Collateral Maintenance Requirements for Credit Extensions to Ease Stock Market Volatility
- Korea Financial Investment Association — Implementation of the Exemption from Collateral Maintenance Requirements for Credit Extensions to Ease Stock Market Volatility
- Korean Government Policy Briefing — Three-Month Exemption from the Collateral Maintenance Requirement for Securities Firms’ Margin Loans
- KB Securities — Notice of Temporary Changes to Collateral Maintenance Ratios for Credit and Loan Transactions
- Korea Investment & Securities — Notice of Temporary Deferral of Forced Liquidation Due to Collateral Shortfalls in Credit and Loan Transactions
- Kiwoom Securities — Notice of Temporary Deferral of Forced Liquidation Due to Collateral Shortfalls in Credit and Loan Transactions
