A bull statue symbolizing a bull market stands at the entrance of the Korea Exchange in Yeouido, Seoul. [Herald DB]
A bull statue symbolizing a bull market stands at the entrance of the Korea Exchange in Yeouido, Seoul. [Herald DB]

Starting Thursday, online peer-to-peer lending platforms must keep their monthly new stock loan volume within 30 percent of the previous month's total new linked lending. Each borrower's stock loan limit will also be capped at 1 billion won ($670,000).

Stock loans are lending products that use shares held in a securities account as collateral.

The Financial Services Commission announced Wednesday that it will implement the "online P2P lending sector stock loan risk management measures" as an administrative guidance order from the Financial Supervisory Service.

The measures aim to bring stock loan activity among online P2P lenders to a manageable level, as a buoyant stock market has driven a surge in such lending. The FSC expects the rules to ease risks stemming from an overconcentration of stock loans among online P2P lenders.

For new stock loan originations, an exception applies to platforms that keep their month-end stock loan balance from August onward at or below the balance recorded at the end of June.

The outstanding stock loan balance across online P2P lenders stood at 898.3 billion won at the end of June, up 374.5 billion won in the first half of this year alone — a 71.5 percent increase from the end of last year.

"We plan to closely monitor each platform's compliance and, where necessary, guide them to strengthen stock loan risk management through meetings with senior management," a financial authority official said.


ehkim@heraldcorp.com