Korea Suspends Stock Short Selling Amidst Global Concerns

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.

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

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

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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.

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

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

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

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

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

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