Financial Services Commission "Short Selling Ban Scheduled to End on March 15"

[Asia Economy Reporter Kangwook Cho] The Financial Services Commission (FSC) has clearly stated its position to resume short selling in March.

On the 11th, the FSC announced through a notification message, "There have been inquiries and numerous reports regarding the resumption of short selling," adding, "The temporary ban on short selling currently in effect due to the novel coronavirus disease (COVID-19) is scheduled to end on March 15."

The FSC further stated, "We plan to complete institutional improvements aimed at resuming short selling in March, including strengthening penalties for illegal short selling, improving the market maker system, and enhancing individual investors' access to short selling."

This statement from the FSC is interpreted as drawing a line against recent calls from within and outside the political sphere to extend the ban on short selling.

Yang Hyang-ja, a Supreme Council member of the Democratic Party of Korea, mentioned market anxiety over the dysfunctional aspects of short selling during the Supreme Council meeting on the same day, saying, "We need to seriously consider extending the ban on short selling."

Earlier, Democratic Party lawmakers including Park Yong-jin publicly requested the FSC to carefully reconsider the resumption of short selling.

In March last year, when stock prices plummeted due to the COVID-19 outbreak, the financial authorities decided on a market measure to ban short selling on all listed stocks for six months. Considering that COVID-19 had not ended, the measure was extended for another six months.

[Image source=Yonhap News]