Jang Kyung-ho, Chairman of the KOSDAQ Association, "Short Selling Exclusions for KOSDAQ Companies Should Be Increased"

Restriction on Short Selling Resumption Needed for Top 30 Market Cap Companies or KRX300 Constituents
Individual Investors Suffer and SMEs Struggle to Cope
"Will Promote Corporate Inheritance and Gift Tax Cuts and Adjust Stock Option Taxation Timing"

Jang Kyung-ho, the new chairman of the KOSDAQ Association, is holding an online press conference on the 16th. (Provided by KOSDAQ Association)

[Asia Economy Reporter Minwoo Lee] Jang Kyung-ho, the newly appointed chairman of the KOSDAQ Association (CEO of Enox Advanced Materials), emphasized the need to expand the scope of short-selling exemptions to revitalize the KOSDAQ market. This is because individual investors are numerous and could suffer losses, and small- to medium-sized KOSDAQ companies find it difficult to adequately respond to market disruptions caused by short-selling.

Chairman Jang stressed this during an online press conference held on the 16th. Although short-selling, which has been banned for about a year starting May 3rd only for the components of KOSPI 200 and KOSDAQ 150, will partially resume, he pointed out that this does not reflect the practical difficulties.

While acknowledging the positive functions of short-selling such as price discovery, liquidity provision, and hedging (risk avoidance), Chairman Jang argued that appropriate regulations are necessary due to the side effects that could harm individual investors and companies. He stated, "Since the KOSDAQ market is centered on individual investors, many investors could suffer losses from corporate value distortion and malicious market disruption caused by short-selling, and small- to medium-sized KOSDAQ companies are in a situation where they cannot adequately respond to this. I hope that short-selling will only resume for KOSDAQ companies of a certain scale, such as the top 30 by market capitalization or components of the KRX300."

He set this year’s vision for the association as ‘A reliable partner for a new future, an engine of economic growth, KOSDAQ’ and also revealed the direction for key projects. First, he emphasized that policy functions will be strengthened and regulations eased to improve the business environment. Chairman Jang explained, "We will actively propose to policy authorities measures to investigate and improve the impact of the amendment to the Commercial Act, as well as to supplement the Serious Accident Punishment Act, class action system, and punitive damages system. We will support smooth business succession through lowering inheritance and gift taxes and improving post-management systems, and propose deferring stock option taxation to the time of disposal."

Additionally, he announced plans to propose the introduction of a business loss reserve system for newly listed small and medium enterprises to help excellent unlisted companies settle in the KOSDAQ market. In line with the growing importance of ESG (Environmental, Social, and Governance) management, he also plans to present ESG models suitable for small and medium enterprises. Chairman Jang pledged, "We will focus all the association’s capabilities to ensure that KOSDAQ companies can actively respond to the changing environment and become a strong backbone of our economy."

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