Kim Joo-hyun, Financial Services Commission Chairman, "Legislative Support Needed to Establish Short Selling Computerization"

Financial Services Commission's Short Selling System Improvement Briefing on the 13th Afternoon
Institutional Loan Repayment Period Likely Limited to 90 Days
Amendment of Capital Markets Act Required for Computerization

Chu Kyung-ho, floor leader of the People Power Party, is speaking at the 'Improvement of the Short Selling System for Market Order Establishment' bipartisan council held at the National Assembly on the 13th. Photo by Hyunmin Kim kimhyun81@

Kim Joo-hyun, Chairman of the Financial Services Commission, said on the 13th, "We hope for the ruling party's active legislative support for follow-up measures on the computerization of short selling." This is because a legal amendment is necessary to implement the system, following the announcement of plans by the Financial Services Commission and the Financial Supervisory Service to establish a system to preemptively block illegal short selling.

Chairman Kim attended the 'Short Selling System Improvement for Market Order Establishment' meeting among civilians, the ruling party, and the government held at the National Assembly in Yeouido that morning, stating, "The computerization system for short selling is expected to be a groundbreaking turning point that fundamentally protects investors."

He explained, "The government reported on the direction of system improvement after the complete ban on short selling last November," adding, "The Financial Services Commission and the Financial Supervisory Service prepared improvement plans through various public discussions, including National Assembly debates, forums, and a short selling system improvement task force (TF) from the public's perspective."

The financial authorities previously announced plans to establish the 'Short Selling Central Inspection System (NSDS)' to block illegal short selling. Along with this, they decided to strengthen financial companies' own balance management systems and internal control functions. The government plans to resume short selling in March next year when the NSDS system is fully completed.

To achieve this, the Capital Markets Act must be amended. The ruling party and government plan to propose a bill reflecting these contents in the 22nd National Assembly. This is why Chairman Kim emphasized "legislative support" at the civilian-ruling party-government meeting.

The short selling system improvement plan has reflected individual investors' opinions as much as possible. The repayment period for loan transactions of institutional investors' short selling will be limited to 90 days, the same as individuals, and the number of times this period can be extended will also be restricted.