Park Yong-jin "Welcomes Extension of Short Selling Ban... Must Correct Market Unfairness"

Democratic Party lawmaker Park Yong-jin is holding a press conference related to Samsung Vice Chairman Lee Jae-yong at the National Assembly on the 15th. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Koo Chae-eun] On the 3rd, Park Yong-jin, a member of the Democratic Party of Korea, expressed his position welcoming the financial authorities' extension of the short-selling ban.

On the same day, Park said on Facebook, "It is the duty of the financial authorities and the National Assembly to identify and correct the institutional problems of short selling, and I expect the government and the ruling party to continue to make responsible joint efforts to rectify unfairness in the capital market."

The Financial Services Commission decided at an emergency meeting in the afternoon to extend the short-selling ban, which was scheduled to end on March 15, by about seven weeks until May 2. Short selling will resume from May 3 for large-cap stocks included in the KOSPI 200 and KOSDAQ 150 indices, while the ban on other small-cap stocks will be extended indefinitely.

Park diagnosed, "Although the Capital Markets Act related to short selling was passed at the end of last year, progress on 'strengthening securities firms' responsibilities' and 'building computerized systems' had not been made."

He pointed out, "Only after raising the issue did the financial authorities begin to explain that specific measures and enforcement ordinances were already included, but according to the short-selling system improvement plan received through the Korea Exchange in January this year, the construction of the computerized system was a continuous task with an unclear completion date."

Park plans to propose a "Capital Markets Act amendment mandating computerized short-selling transactions to strengthen securities firms' responsibilities" before the Lunar New Year. He criticized, "As seen in the U.S. GameStop incident, dissatisfaction and complaints from individual investors about short selling exist even in the advanced capital market of the United States. Likewise, despite the Financial Services Commission's repeated promises to improve the short-selling system, market participants in Korea still have anxiety and dissatisfaction about the resumption of short selling."

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