[2021 National Audit] Jeong Eun-bo: "Indirect Investment Forms Like Individual Short Selling Funds Are Preferable"

Jeong Eun-bo, Governor of the Financial Supervisory Service, attended the National Assembly's audit of the Financial Supervisory Service held by the National Assembly's Political Affairs Committee on the 7th and is responding to questions from lawmakers. Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Park Jihwan] Jung Eun-bo, Governor of the Financial Supervisory Service, stated on the 7th, "If short selling operates under normal circumstances, it is naturally judged to have significant positive functions," and added, "In the mid to long term, individual short selling investment is preferable in the form of indirect investment through funds."

On the same day, Governor Jung responded this way to a question from Min Hyung-bae, a member of the Democratic Party of Korea, during the National Assembly's Political Affairs Committee audit, asking, "Which side is greater, the positive or negative functions of short selling?"

Assemblyman Min pointed out, "The volume of short selling available to individuals is 0.00045%, while institutions account for 99.9999%, and even if naked short selling is detected, the fine is only about 2.6%, which is why people still say the playing field is tilted against individuals."

Governor Jung said, "We are making many efforts to correct the tilted playing field related to short selling," adding, "Currently, 19 companies provide individual lending services, which will be expanded to all 28 securities firms within the year, along with efforts to extend the lending period and expand the stocks subject to short selling."

Governor Jung emphasized, "Generally, in foreign countries, individuals usually invest indirectly through funds rather than directly participating in the short selling market, and this is the norm in most cases," and added, "From a mid to long-term perspective, it is considered more desirable to guide individual short selling towards indirect investment."

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