Lee Bok-hyun Admits Short Selling Mistake: "Ban on Short Selling Is an Embarrassing Matter"

Emphasis on Resuming Short Selling in March Next Year
"Amendment to Commercial Act and System Improvement Within the Year"
Confirmation of Intent to Proceed with Inspection of Korea Zinc

On the 13th, at the Global Investor Relations (IR) event held at the Grand Hyatt Hotel in Hong Kong, Lee Bok-hyun, Governor of the Financial Supervisory Service, explained the progress of advancing the Korean capital market. Financial Supervisory Service

Lee Bok-hyun, Governor of the Financial Supervisory Service, acknowledged that the complete ban on short selling in the domestic stock market does not align with global standards. He expressed a firm intention to resume short selling by March 31 next year, stating that the short selling system and IT infrastructure will be fully prepared by the first quarter of next year.

On the 13th (local time), at an overseas investor relations (IR) event held at the Grand Hyatt Hotel in Hong Kong, Governor Lee said, "It may be embarrassing that short selling is completely banned while we claim to be advancing the capital market and aligning with international standards," adding, "All the authorities share the same view."

When asked about the short selling ban, Governor Lee explained, "Korea's regulations differ from those of the U.S. and Hong Kong, with a broader scope defining illegal short selling. There is a need to clearly distinguish what is illegal and legal, and the work on creating guidelines is nearly complete."

He continued, "After this year, we aim to eliminate the discomfort among domestic and foreign investors who face the risk of being investigated, and "based on completing the system and IT infrastructure by the first quarter of next year, we are preparing to return to a short selling system aligned with advanced market standards like those in Hong Kong, London, and New York," he emphasized.

This contrasts with Governor Lee’s stance at the time of the full short selling ban announcement in November last year. He had said, "The complete ban on short selling was an inevitable choice due to the significant distortion of investor decisions caused by the loss of trust in the price system," and added, "It was unavoidable to protect individual investors."

He also mentioned improvements in corporate governance. Amid the Democratic Party of Korea adopting a bill revision to the Commercial Act that includes shareholders in the 'duty of loyalty' of directors as party policy, Governor Lee said, "There seems to be room for institutional improvement by mid-December at the latest," and promised, "I can assure you that there is significant progress within the government and the National Assembly."

Additionally, he reaffirmed the intention to investigate the public tender offer and rights offering of Korea Zinc, which had been a major controversy in the capital market. Regarding inspections of Mirae Asset Securities and KB Securities, the underwriters of the rights offering, Governor Lee stated, "We have confirmed quite meaningful facts."