Eun Sung-soo: "Even if Short Selling Resumes, We Will Proceed with System Improvements"

[Asia Economy Reporter Eunmo Koo] Eun Sung-soo, Chairman of the Financial Services Commission, stated that he will listen to various opinions regarding the lifting of the short-selling ban scheduled for September and decide whether to extend it. Chairman Eun clarified that even if short-selling is resumed in the future, it will be a lifting supplemented by the existing system rather than an unconditional removal.

On the afternoon of the 11th, Chairman Eun held a press briefing at the Government Complex Seoul to explain the key tasks for the second half of this year and made these remarks.

On that day, Chairman Eun said, “It has been about three months since the short-selling ban was imposed, and fortunately, the stock market has risen significantly,” adding, “I am also well aware that there are demands for an extension of the short-selling ban as a result.”

However, he withheld judgment on whether the recent rise in the stock market was due to the effect of the short-selling ban. Chairman Eun said, “Other countries’ markets have risen to levels similar to the end of last year, and among them, some have banned short-selling while others have not, so it is difficult to say which is correct.”

He continued, “Since I understand well what those advocating for an extension of the short-selling ban think, I will first carefully examine the effects and related aspects in detail, and if there are parts that require system improvement, I will probably restore it along with system improvements,” adding, “I will communicate well over the remaining three months.”

Earlier, the Financial Services Commission banned short-selling for six months from March 16 to September 15 on all listed stocks in the KOSPI, KOSDAQ, and KONEX markets in response to the sharp stock price decline triggered by the COVID-19 outbreak in March.

Short-selling is an investment method where stocks expected to decline in price are borrowed and sold, and if the price actually falls, the stocks are repurchased at a lower price to return them. The structure profits more as the stock price falls. Because of this, some individual investors have consistently criticized short-selling for exacerbating stock price declines.

This content was produced with the assistance of AI translation services.