South Korea Waives 140% Margin Collateral Rule For Three Months After Selloff

South Korea is loosening the leash on margin trading. The government announced Friday it will waive the 140% collateral ratio that companies must normally hold against margin loans, and the relief lasts three months. The change takes effect November 9.

The trigger was a brutal session on South Korean markets. The selloff was sharp enough to trip a 20-minute halt in trading, freezing activity mid-plunge.

Finance Minister Lee Hyoung-il didn't wait around. He called an emergency meeting with other finance officials earlier Friday and signaled the government is ready to go further if the wild swings continue. According to Yonhap news agency, Lee said authorities are watching for 'excessive anxiety and one-sided movement.'

The 140% requirement is a floor meant to keep margin borrowing from running away from the collateral behind it. Suspending it for three months gives firms room to breathe instead of being forced to top up or unwind positions while prices are lurching. Relief measures like this are usually aimed at stopping forced selling from snowballing into a bigger rout.

Lee's message was that Seoul is still at the helm. More measures are on the table if volatility doesn't settle, though the government hasn't said what those would look like. For now, the clock starts November 9.