Financial Services Commission Decides to Extend Short Selling Ban for Additional 6 Months (Comprehensive)

Financial Services Commission Chairman Eun Sung-soo is delivering opening remarks at a meeting with the securities industry held at the Korea Financial Investment Association in Yeouido, Seoul, on the 27th. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Ji-hwan Park] The financial authorities have decided to extend the temporary short-selling ban, which was implemented last March, for an additional six months. This decision is interpreted as taking into account the market situation where the COVID-19 pandemic, the original reason for the short-selling ban, is at a crossroads of resurgence, and the stock market volatility ranges from 2-4%.

The Financial Services Commission announced on the 27th that it held an emergency financial committee meeting and decided to extend the short-selling ban and the relaxation of the daily limit on buy orders for treasury stocks, which were scheduled to end on the 15th of next month.

The short-selling ban will be extended for six months from the 16th of next month for all listed stocks on the KOSPI, KOSDAQ, and KONEX markets. As before, exceptions will be allowed for market making of low-liquidity stocks and derivatives, as well as liquidity provision for exchange-traded funds (ETFs).

The relaxation of the daily limit on buy orders for treasury stocks of listed companies will also be extended for the same period. Additionally, the exemption from the obligation to maintain the credit loan collateral ratio to ease forced sales of securities firms' credit loan collateral stocks will be extended for the same period.

The Financial Services Commission stated, "Considering the recent increase in market volatility due to concerns over the resurgence of COVID-19, the short-selling ban implemented in March will be extended for six months," and added, "During this period, we plan to promote institutional improvements demanded by the market, such as strengthening penalties for illegal short selling and improving accessibility of short selling for individual investors."

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