[Asia Economy Reporter Kwon Jae-hee] Individual investors, who have become a major force in the Korean capital market by leading the 'Donghak Ant Movement,' are raising their voices in policy areas related to the capital market as well. Through national petitions, individual investors are actively voicing their demands for rights, such as the 'postponement of the Financial Investment Income Tax (Fin-Income Tax)' and the 'temporary abolition of short selling.' Their active expression of opinions is also being evaluated positively in terms of long-term market development.
According to the financial investment industry on the 8th, the petition for postponing the Fin-Income Tax, which was posted on the national petition site on the 12th of last month, surpassed 50,000 signatures in just two weeks and was referred to the relevant committee, the National Assembly's Planning and Finance Committee, on the 27th of last month.
A national petition requires more than 50,000 signatures within 30 days of being made public to meet the establishment conditions. The Fin-Income Tax postponement petition was registered on the 12th of last month and received over 10,000 signatures within just one week, reaching over 50,000 by the 26th of the same week, showing the intense interest of individual investors. Among the 53 national petitions conducted last month, only three, including the Fin-Income Tax postponement, were established.
If the ruling and opposition parties fail to reach an agreement on the Fin-Income Tax by the 2nd of next month, the government's proposal to delay the introduction of the tax by two years will automatically be submitted to the plenary session. Currently, the government side, including the Ministry of Strategy and Finance and the Financial Services Commission, favors postponing the Fin-Income Tax until the market stabilizes, but it is known that the Democratic Party, the majority party in the National Assembly, is pushing to independently propose a bill to enforce the tax.
Not only the Fin-Income Tax but also issues related to short selling, which individual investors are highly interested in, have been raised in national petitions. The petition titled
According to the petition, "Although short selling, which involves selling stocks that are not owned, has the positive function of preventing stock price bubbles, it has many more negative effects, such as accelerating price declines and increasing volatility in a bear market," and "Moreover, short selling in the domestic stock market is a 'tilted playing field' for individuals." It further pointed out, "While short selling is a technique actively used in advanced capital markets, if one side inevitably suffers under unfair conditions, this must be corrected," and emphasized, "Short selling should be temporarily abolished until 'fairness' is secured in our stock market."
Previously, short selling was completely banned after the COVID-19 downturn but was partially resumed from May last year. Individual investors have repeatedly requested policy authorities to improve short selling regulations. Although financial authorities have expressed willingness to consider banning short selling, no specific measures have been announced yet.
In this regard, the Korea Stock Investors Union (HanTuYeon), an association of individual investors, also sent a certified letter on the 28th requesting a meeting with Kim Ju-hyun, Chairman of the Financial Services Commission, under the name of its representative, Jeong Ui-jeong.
Hwang Se-woon, a research fellow at the Korea Capital Market Institute, said, "While Western markets have developed centered on institutional investors, individual investor participation has been encouraged from the beginning in Korea, making individual investor participation more active in Asian countries," and added, "Markets inevitably have irrational aspects, and it is positive in terms of long-term development potential that individual investors take an interest in these issues and raise their opinions through improvement discussions and productive debates."
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