Dokyu-sang "Ensuring thorough improvement of illegal short selling prevention system... Improvement plan to be announced soon"

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] Do Gyusang, Vice Chairman of the Financial Services Commission, stated that they plan to thoroughly improve the system so that market participants, including individual investors, do not worry about the issue of illegal short selling.

At the second meeting of the Securities Market Illegal and Unsound Activities Task Force on the 18th, Vice Chairman Do said that monitoring and inspection of illegal short selling will be strengthened and strict punishment will continue in case of regulatory violations.

Regarding short selling transactions by market makers, Vice Chairman Do said, "The exchange is focusing on inspecting whether all 22 market makers engaged in naked short selling and complied with the uptick rule from September to November," adding, "Violations detected will be sanctioned through the Market Surveillance Committee and other channels, and measures will be taken to prevent recurrence."

On the 9th, the amendment to the Capital Markets Act, which raises the penalty level for illegal short selling from the current maximum fine of 10 million KRW to a surcharge within the range of the short selling order amount and increases fines up to 3 to 5 times the amount of unjust gains, passed the National Assembly. Accordingly, the Financial Services Commission is currently working on establishing a post-detection system to prevent illegal naked short selling.

Vice Chairman Do emphasized, "We plan to soon announce measures to establish an illegal short selling detection system and improve the market maker system to restore market trust."

He also stressed that a focused response period will be set until March next year to conduct intensive inspections on companies suspected of illegal and unsound activities using capitalless M&A and convertible bonds.

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