Financial Services Commission Chairman: "Considering Extension of Short-Selling Ban Beyond June Next Year Depending on Situation"

Financial Services Commission Chairman Kim Ju-hyun is responding to a lawmaker's question at the National Assembly's Political Affairs Committee audit held on the 11th. Photo by Kim Hyun-min kimhyun81@

Financial Services Commission Chairman Kim Joo-hyun stated on the 9th that the short-selling ban period, currently set until June next year, could be extended depending on the situation.

At the National Assembly's Legislation and Judiciary Committee plenary session that day, in response to People Power Party lawmaker Kang Min-guk's question about the possibility of extending the short-selling ban, Chairman Kim replied, "If the current issues are not resolved, we will have to consider various options." This was interpreted to mean that if concerns about fairness related to short-selling are not resolved, extending the ban period could be considered.

When Kang asked, "Are you also considering a ban on market makers' short-selling?" Kim explained, "Market makers play a role in forming the market and protecting investors, so during past bans, the prohibition was not applied to them."

However, he added, "If we block market makers' short-selling, I will seek opinions again on what implications this would have for investor protection and the development of our market." He continued, "Regarding the increase in short-selling during price fluctuations, we will conduct an investigation with the Financial Supervisory Service."

Chairman Kim reiterated his position to "reconsider from the ground up" regarding the establishment of a real-time computerized system to control short-selling transactions. When Democratic Party lawmaker Lee Yong-woo asked, "Isn't developing the computerized system by June next year hasty?" Kim responded, "We will discuss with top experts and proceed in a way that the public can accept."

When opposition lawmakers pointed out that this was a "decision for the general election" or a capitulation to pressure from the ruling party, he gave a fundamental answer, saying, "It is true that the opinion was cautious, but this ban was a measure based on market conditions." Previously, the Financial Services Commission had taken the position that short-selling should be fully resumed in the long term in line with global standard criteria to be included in the MSCI developed market index.