# South Korea Tightens Securities Liquidity Rules

> South Korea's securities firms face stricter liquidity rules starting next year, hitting small firms hardest with short-term funding risks.
- Title: South Korea Tightens Securities Liquidity Rules | Shortify
- Summary: South Korea's securities firms face stricter liquidity rules starting next year, hitting small firms hardest with short-term funding risks. South Korea…
- Keywords: south korea, securities firms, liquidity rules, short-term funding, capital below 1 trillion won, rp sales, repurchase agreements, korea ratings, shinhan securities, bookook securities, cape investment securities, hanyang securities
- Source: BigGo Finance — https://finance.biggo.com/news/448044ba-0493-4918-823c-672f2ad2672b
- Author: BigGo Finance
- Published: 2026-10-12T07:25:42+00:00
- Read time: 1 min
- Topics: south korea, securities firms, liquidity rules, short-term funding, capital below 1 trillion won, rp sales, repurchase agreements, korea ratings, shinhan securities, bookook securities, cape investment securities, hanyang securities
## New Liquidity Rules Start January
South Korea's securities firm liquidity regulations will expand to all firms starting January next year.
## Small Firms Face Higher Liquidity Burden
Securities firms with capital below 1 trillion won face significantly higher liquidity ratios under new rules.
## Short-Term Funding Reliance Doubled
Small firms rely on short-term collateralized funding at 71.2% of total borrowings, double comprehensive firms' 37.0%.
## Liquidity Ratios Drop 12 Percentage Points
Korea Ratings estimates 1-month and 3-month liquidity ratios will fall to 106% and 104% from current levels.
## Small Firms Near 100% Threshold
Bookook Securities, Cape Investment & Securities, and Hanyang Securities are already near the 100% liquidity ratio threshold.
## Funding Structure Creates Risk
Small firms have higher reliance on short-term funding channels with limited options during market volatility.
## RP Sales and Securities Sold Under Repurchase Agreements
Small firms use 41.6% of borrowings for RP sales and 29.6% for securities sold under repurchase agreements.
## Shinhan Securities Analysts Expect Divergence
Shinhan Securities expects liquidity outcomes to diverge based on credit quality within small and mid-sized firms.

> Kim Sang-in, a research analyst at Shinhan Securities, said, "Large comprehensive IB securities firms face significant contingent liability burdens, but their liquidity risk is limited given that they have proactively increased bond issuance, diversified funding channels, and potential affiliate support."
## Liquidity Ratios Decline for Small Firms
Bookook Securities' 3-month liquidity ratio fell 50 percentage points from 155% to 105% over the past year.
## Small Firms May Fall Below Threshold
Some small firms could fall below the 100% regulatory liquidity threshold under new standards.
## Funding Restructuring Expected
Securities firms will likely restructure funding by reducing short-term and increasing long-term borrowing.
## Key takeaway

South Korea expands liquidity regulations to all securities firms, increasing short-term funding exposure risks for small and mid-sized firms.