Eun Sung-soo, Financial Services Commission Chairman, "Discussing 'Split Extension' of Short Selling Ban"

Eun Sung-soo, Chairman of the Financial Services Commission (Photo by Yonhap News)

[Asia Economy Reporters Kim Hyo-jin, Park Ji-hwan] Eun Sung-soo, Chairman of the Financial Services Commission, expressed that he is considering a so-called 'split extension' that would extend the short-selling ban only for KOSPI-listed stocks or large-cap stocks.

On the 24th, during the National Assembly Budget and Accounts Committee's comprehensive policy questioning, in response to a question from Park Yong-jin of the Democratic Party regarding the extension of the short-selling ban, Chairman Eun said, "We are discussing various options, including the 'split extension'."

In response to Park's criticism that "while a cautious approach is good, the current short-selling system, which is so unfair to individuals that it is called an antlion pit, needs improvement," Chairman Eun said, "I understand the nuance and meaning of the term 'tilted playing field,' and we plan to improve the system so that individual investors' access is not restricted."

Park pointed out, "The proportion of individual investors in short-selling in Korea is only 1 to 2%. However, individuals account for 70 to 80% of total trading volume. Individual investors are effectively unable to participate in short-selling, and since they only suffer losses from it, they naturally feel it is unfair."

Chairman Eun responded, "When improving the system, we are considering broadening the base in that regard. Although it is a personal opinion and somewhat burdensome, increasing equal opportunities for private equity funds is something we hesitate about because there have been cases where individuals suffered losses."

He added, "First, we will devise a plan to give individual investors opportunities as well and to ensure that investments can be made cautiously."

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