Korean securities firms earned 175.36 billion won in interest income from sell-proceeds collateral loans over a three-year period starting in 2023, according to data submitted by the Financial Supervisory Service to National Assembly members Kim Sang-hoon and Han Chang-min. Kiwoom Securities and Mirae Asset Securities accounted for 90.7% of total interest income in 2025, with Kiwoom alone collecting 36.59 billion won that year. The loans exist because Korea's T+2 settlement system requires investors to wait two business days after selling stocks to receive proceeds, prompting some investors to borrow against their own confirmed sale proceeds at interest rates reaching 10% annually. Regulatory scrutiny intensified after President Lee Jae-myung questioned the practice in March, asking why investors must wait until the day after tomorrow for funds from stocks sold today.
Kiwoom Securities Earned 31.32 Billion Won in Four Months of 2026
The 10 major Korean securities firms collected 65.92 billion won in interest from sell-proceeds collateral loans in 2025, an increase of 15.06 billion won from 50.86 billion won in 2024. Kiwoom Securities led with 36.59 billion won in 2025, while Mirae Asset Securities earned 23.21 billion won. In the first four months of 2026 alone, total interest income reached 53.6 billion won, surpassing the full-year 2024 figure. Kiwoom Securities collected 31.32 billion won during this period, and Mirae Asset Securities earned 16.8 billion won. Kiwoom's four-month interest income in 2026 was double its first-quarter financial product interest profit of 18.8 billion won. A Kiwoom Securities official stated that corporate clients, foreign investors, and high-net-worth individuals using private banking services do not use sell-proceeds collateral loans, and that Kiwoom's high proportion of retail customers drives its larger share of this loan product.
Securities Firms Charge 9-10% Interest on T+2 Settlement Loans
Sell-proceeds collateral loans allow investors to borrow against stock sale proceeds before the T+2 settlement date arrives. Investors pay interest on their own confirmed sale proceeds to receive funds one or two days earlier. NH Investment & Securities charges the highest rate at 10% annually, while Kiwoom Securities charges 9.5%. Samsung Securities charges 9%, and Shinhan Investment charges up to 9.9% depending on customer assets. Mirae Asset Securities reduced its rate from 9% to 7.95% effective May 27. Some brokerages avoid the term "loan" in product names: Meritz Securities calls it "Immediate Withdrawal of Sale Funds Service," while Toss Securities and Kakao Pay Securities use "Receive Stock Sale Proceeds in Advance." The loans are automatically repaid when settlement occurs one or two days later, making them effectively risk-free for securities firms. Usage has increased alongside rising margin debt among retail investors.
Lawmaker Proposes Disclosure Requirements for Loan Interest Rates
Lawmaker Cho In-cheol of the Democratic Party of Korea proposed a capital markets law amendment on May 7 requiring securities firms to disclose the basis for interest rate calculations on sell-proceeds collateral loans. The bill would mandate public disclosure of the rationale and details behind interest rates charged when firms extend credit using proceeds from sold or redeemed securities as collateral. Cho stated that despite the loans being effectively risk-free due to confirmed settlement proceeds serving as collateral, securities firms charge excessive interest up to 10%, and that requiring disclosure of rate calculation processes would eliminate unjustified profiteering. The Board of Audit and Inspection began examining the appropriateness of securities firms' margin financing and loan interest rates on April 24, as part of a "Financial Investor Protection Status" audit covering the Financial Services Commission and Financial Supervisory Service. The audit will verify the appropriateness of loan interest rate calculation and disclosure, as well as fee transparency. President Lee Jae-myung raised the issue in March at a capital markets meeting at the presidential office, questioning why investors who sell stocks today must wait until the day after tomorrow for proceeds and noting that securities firms appear to benefit significantly during the interim period.
FAQ
What is a sell-proceeds collateral loan in the Korean stock market?
A sell-proceeds collateral loan is a product that allows investors to borrow against confirmed stock sale proceeds before the T+2 settlement date, receiving funds one or two days earlier in exchange for paying interest rates ranging from 9% to 10% annually.
How much interest income did Kiwoom Securities earn from these loans in the first four months of 2026?
Kiwoom Securities earned 31.32 billion won in interest income from sell-proceeds collateral loans during the first four months of 2026, according to Financial Supervisory Service data submitted to the National Assembly.
What regulatory action has been proposed regarding these loan interest rates?
Lawmaker Cho In-cheol proposed a capital markets law amendment on May 7 requiring securities firms to publicly disclose the basis and details of interest rate calculations for sell-proceeds collateral loans, and the Board of Audit and Inspection began examining loan interest rate appropriateness on April 24.
