Four Securities-Related Organizations Join Hands... Establishing a 760 Billion Won Scale Jeungan Fund

Korea Exchange, Korea Securities Depository, Korea Securities Finance, and Korea Financial Investment Association Sign MOU
7.6 Trillion Won Investment Fund Created... 30% to be Expedited First

From the left, Lee Myung-ho, President of Korea Securities Depository; Jung Ji-won, Chairman of Korea Exchange; Na Jae-chul, Chairman of Korea Financial Investment Association; Jung Wan-kyu, President of Korea Securities Finance (Provided by Korea Exchange)

[Asia Economy Reporter Minwoo Lee] The Korea Exchange, Korea Securities Depository, Korea Securities Finance, and Korea Financial Investment Association, among other securities-related organizations, have agreed to jointly establish a Securities Market Stabilization Fund.

The Exchange announced on the 25th that these securities-related organizations signed a "Business Agreement for the Establishment of a 760 Billion KRW Securities Market Stabilization Fund" at 10 a.m. at the Exchange's Seoul headquarters. This move aims to stabilize the domestic stock market, which has been shaken due to the global spread of the novel coronavirus disease (COVID-19), by injecting such funds.

According to this agreement, the four securities-related organizations will jointly set up a Securities Market Stabilization Fund worth 760 billion KRW. Considering the level of liquid funds, the Exchange will provide the largest portion of 300 billion KRW (39.5%). The Depository and Securities Finance will each prepare 200 billion KRW (26.3%), and the Financial Investment Association will prepare 60 billion KRW (7.9%).

Going forward, each organization will go through internal procedures such as board approvals and make installment payments to the Securities Market Stabilization Fund (capital call method). Of the total amount to be raised, 30% of the first installment will be executed promptly.