Seoul: The country's financial regulator announced plans on Monday to revise liquidity level-related regulations, aiming to prompt securities firms to enhance their risk management capabilities. Under the proposed changes, all securities firms will be required to maintain their one-month and three-month liquidity ratios above 100 percent.

According to Yonhap News Agency, the Financial Services Commission (FSC) stated that the revision is expected to be implemented starting next year, following necessary legal and enforcement modifications. Currently, only 23 securities firms, including 10 brokerage houses that are permitted to engage in a wide range of business activities such as corporate lending, fall under these regulations.

The liquidity ratio is determined by dividing liquid assets by liquid debts. The FSC noted that their new liquidity ratio measurement will take into account discounts of volatility risks on liquidity assets. Additionally, contingent liabilities and debt guarantees will be included in the debt liquidity level. The FSC believes these changes will more accurately reflect the financial soundness of firms and improve their ability to respond to various risks.