Korea Suspends Stock Short Selling Amidst Global Concerns

5 November 2023Β 


Korea's financial regulator has announced a temporary ban on stock short selling, effective from November 6, 2023, until the end of June 2024, to address growing external uncertainties in the market.

Korea's Financial Services Commission (FSC) cited concerns over the fair pricing of stocks due to illegal short selling by global investment banks.

Impact on the Market The ban comes amidst global financial instability and conflicts, such as the Israel-Hamas war, affecting the domestic market.

Government's Response Korea's Financial Supervisory Service (FSS) has formed a special task force to inspect global investment banks suspected of illegal short selling.

Global Impact The FSC highlights the need to reform the system to prevent an "unlevel playing field" caused by illegal naked short selling.

Looking Ahead The government will work to establish a real-time system to prevent illegal short selling before June 2024.

International Cooperation Korea's actions are part of a global effort to combat illegal short selling by foreign and institutional investors.

Market Stability The ban aims to restore stability and confidence in Korea's local stock market.

Future Outlook Korea seeks to create a fair and secure stock market for investors.