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Meritz Securities obtains license for prime brokerage business

Collected: 2017.11.23

Distributed: 2017.11.24

Source: Go Direct

South Korea’s Meritz Securities Co. became the seventh broker in Korea to expand to prime brokerage services after meeting the minimum equity capital requirement of 3 trillion won ($2.8 billion).

The Financial Services Commission (FSC) recognized Meritz Securities as a comprehensive financial investment entity during its regular meeting on Wednesday, allowing the brokerage house to add prime brokerage business, a package of investment banking and securities services for hedge funds on top of credit-based lending to companies.

At 1:18 p.m. on Thursday, shares of Meritz Securities rose 1.03 percent to 4,890 won in Seoul trading.

Meritz Securities bought IM Investment & Securities in June 2015 and offered rights in non-vote stocks worth 748 billion won in June this year to scale up to meet the capital requirement.

There are seven securities companies in Korea that gained permission to extend prime brokerage service - Mirae Asset Daewoo Securities Co., NH Investment & Securities Co., KB Securities Co., Samsung Securities Co., Korea Investment & Securities Co., Shinhan Investment Corp. and Meritz Securities. Among them, Mirae Asset, NH, KB, Samsung and Korea last week were allowed to add investment banking activities as full-fledged investment banks after meeting the eligibility with net worth of at least 4 trillion won.

Korea Investment & Securities is the only entity among them to have won the license to issue and sell registered promissory notes to retail investors.

By Jin Young-tae and Choi Mira

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