Lee Bok-hyun "Feeling a sense of duty... Smoothly advancing computerized short selling"

Attended Min Party-Political Council Meeting on 13th and Spoke
Government and Ruling Party Conduct Specific Discussions in Private

Lee Bok-hyun, Governor of the Financial Supervisory Service [Image source=Yonhap News]

Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), said on the 13th, "I feel a heavy sense of duty," and added, "We will steadily promote the computerization of short selling and establish the principle that illegal short selling will definitely be punished."

Governor Lee emphasized this at the morning meeting of the Min-Dang-Jeong Council held at the National Assembly main building in Yeouido, Seoul, saying, "We will create an environment where all investors can trade fairly."

He began by expressing gratitude, saying, "Thank you for creating a place where the Min-Dang-Jeong can discuss improvement measures together," and explained, "Since the full ban in November last year, the FSS has been promoting system improvements and computerization to prevent illegal short selling in order to change the market's distrust."

He continued, "We have put various measures on the table and reviewed their pros, cons, and effectiveness, and have gone through a public discussion process including forums with individual investors and dialogues with the investment banking (IB) industry," adding, "Through this, we were able to develop a plan for the computerization of short selling."

The meeting was organized as a forum for the government and the ruling party to discuss improvement measures ahead of the expiration of the short selling system improvement period at the end of this month. The Financial Services Commission (FSC) had fully banned short selling in the domestic stock market until June 30, 2024, starting from November last year, aiming to supplement and redesign the short selling system.

The FSS is expected to explain plans for building a computerized system to monitor illegal short selling in cooperation with the Korea Exchange. The official name is the "Illegal Short Selling Central Blocking System (NSDS)," which the Exchange is aiming to complete by March next year. The decision on whether to resume short selling will be made at a future FSC meeting, but the resumption is expected to occur after the computerized system is established.

However, the specific details of the discussions were held privately. The short selling system improvement plan, which was a confidential agenda item at the meeting, is expected to include the timing of resumption, the stock borrowing repayment period, and collateral ratio.

Attendees from the political sector included Chu Kyung-ho, floor leader; Jeong Jeom-sik, chairman of the Policy Committee; Kim Sang-hoon, chairman of the Special Committee on Livelihood Economy Stability; Bae Jun-young, senior deputy floor leader; Jang Dong-hyuk, senior floor spokesperson; and Jeong Hee-yong, chief secretary to the floor leader.

From the government side, in addition to Kim Ju-hyun, chairman of the FSC, and Lee Bok-hyun, governor of the FSS, private sector attendees included Jung Eun-bo, chairman of the Korea Exchange; Kim Jeong-gak, president of Korea Securities Finance Corporation; Lee Soon-ho, president of the Korea Securities Depository; and Seo Yoo-seok, chairman of the Korea Financial Investment Association. The main agenda reports were handled by Lee Yun-soo, member of the FSC's Securities and Futures Commission, and Ham Yong-il, deputy governor of the FSS.