Seoul: The chief of South Korea's financial regulator announced that the country will lift its temporary ban on short selling next month as initially planned, with expectations of a limited impact on the market.
According to Yonhap News Agency, Kim Byoung-hwan, the chief of the Financial Services Commission (FSC), confirmed during a press meeting that the short selling scheme is set to resume in full on March 31, assuming no systematic issues are identified. Kim emphasized that the systems and regulatory rules have been updated over the past year, leaving no reason to only partially reopen short selling.
Kim also noted that the FSC is preparing to implement certain restrictions to prevent excessive short selling of specific stocks, which could lead to severe market volatility. The temporary ban on short selling was enacted in November 2023 following incidents of naked short selling violations involving several global investment banks.
Prior to the ban, short selling was permitted for 350 listed firms, including those in the KOSPI 200 and KOSDAQ 150 indexes. The regulator now plans to extend this allowance to all publicly traded companies in the country.