South Korea Waives Stock-Margin Collateral Rule for Three Months

South Korea will temporarily suspend brokerages’ requirement to maintain a 140% collateral ratio on margin-financed stock trades after a selloff triggered the KOSPI’s 11th circuit breaker of the year. The three-month waiver is intended to limit forced liquidations when falling prices prompt collateral calls.

The measure takes effect Nov. 9. The KOSPI, South Korea’s benchmark stock index, ended the session at 5,059.65, down 324.15 points, or 6.02%. It fell as much as 8.55% intraday. When the circuit breaker was triggered, the index stood at 4,924.61, down 8.52% from the previous close, and trading was halted for 20 minutes.

The government linked the selloff to uncertainty about AI industry policy, including concerns over regulation of AI data centers, and weakening global investor confidence. It said economic growth was expected to remain in the mid-3% range this year and exports could reach $1 trillion. The government said it would prepare additional market-stabilization measures if volatility worsens and continue efforts to improve capital-market fundamentals.