Consignment guarantee money

Consignment guarantee money means the money or securities which a securities company collects from a customer to secure his performance of settlement when a member is consigned trading of securities by a customer, the KRX allows a member to collect consignment guarantee money if the member is entrusted trading by the customer. If a member is entrusted trading by a consigner, the member can collect cash in case of buying while selling the very securities or cash in case of selling. In the past, the KRX decided rate and method of collection but member companies has autonomously decided them since April 1, 1998. Accordingly, securities company now autonomously decides collection rate which was 100% in case of administrative and supervision issue, and less than 20% of entrusted amount at the company’s discretion in case of substitute securities. At present most of securities companies collect consignment guarantee money at the rate of about 40% for private investors.