- Requirements for Eligible Collateral
- The KRX has established requirements for eligible collateral in order to prevent troubled assets from being accepted as collateral. Eligible collateral means assets which are of sufficient stability and liquidity for use as collateral. Through this collateral management system, the KRX ensures sufficient collateral value exists in the case of crisis situations.
- Guidelines for Eligible Collateral
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- Newly listed stocks will always be considered eligible during the quarter in which they are listed and in the following quarter.
- If an item previously classified as qualifying collateral fails to meet the requirements, the member will be notified immediately, and no deposits of the securities in question will be accepted.
- In the case of stocks subject to market measures (meaning stocks designated as administrative issue, scheduled to be delisted, or falling under specific cases of suspension of trading, etc.), the substitute price is regarded as 0.
- In addition, in order to manage wrong-way risk, the KRX prohibits the payment of a margin to cover a position held by participants in securities that they have issued or securities issued by their affiliates.