Financial Services Commission Vice Chairman: "Will Take Measures on Short Selling Mid- to Long-Term Tasks According to Market Conditions"

"MSCI Advanced Index Inclusion, No Rush"

"The full resumption of short selling is, in the long term, part of the task of advancing the capital market. It is difficult to explicitly declare what will be done at this moment, but we plan to take appropriate measures according to market conditions."

Kim So-young, Vice Chairman of the Financial Services Commission, stated during a Q&A session with foreign media on the 24th that whether short selling will be allowed or banned will be appropriately handled according to market conditions. She explained, "Short selling is quite a cautious matter, but I think it is good to consider that we have some time now," adding, "In the mid to long term, I believe it will evolve into a more advanced system."

Accordingly, she expressed a stance not to rush the inclusion in the Morgan Stanley Capital International (MSCI) developed markets index. Vice Chairman Kim said, "It would be good if we are included in the MSCI index during the process of advancing development, but I think this is something that can happen on the way to the ultimate goal rather than the goal itself." Regarding the progress, she added, "We continue to communicate with MSCI officials, and it would be good if it goes well, but I think it is difficult to say that all our efforts are focused there," and "The possibility of inclusion in the developed market index will increase in the future."

Kim So-young, Vice Chairman of the Financial Services Commission, is explaining her recent views on the financial market and the direction of capital market policies at a foreign press briefing held on the afternoon of the 24th at the KOSIS Center Multipurpose Hall in the Korea Press Center, Jung-gu, Seoul. Photo by Financial Services Commission

When asked whether 'token securities,' classified as securities under the Capital Markets Act among virtual assets, would be subject to stricter regulations, she said, "Basically, regulation is not the priority; rather, we intend to allow issuance and circulation," adding, "The rights of securities do not disappear just because of what we do, so those aspects will continue to be maintained. Nevertheless, we plan to make various efforts to minimize cases where even a small number of good-faith investors suffer losses." She also stated, "I think consistency with foreign countries is important for non-security virtual assets," and "Considering that, I think a second phase of institutional improvement will likely be introduced."

Regarding how much President Yoon Seok-yeol is aware of the Korea discount-related policies promoted by the Financial Services Commission, Vice Chairman Kim responded, "Basically, the President is very interested in finance and is aware of most policies."

She explained, "There is an annual work report, and even in the recent work report, there was a separate financial briefing for about four and a half hours, which is close to a record in terms of time," adding, "Many of the capital market advancement tasks were part of the campaign pledges during the candidate period, and the President recognized that capital market advancement was an important task even before becoming President."

Meanwhile, Vice Chairman Kim addressed the controversy over government intervention related to recent bank governance restructuring, saying, "If capable people can do it and the appointment process is fair, there is no need to worry, but the current situation is not necessarily like that, so we plan to improve the overall system and announce it in March." She said, "In the case of banks, we will consider promoting competition and improving governance," and added, "We are also thinking about improving the interest rate system, the interest rate spread between deposits and loans, performance bonuses, retirement pay, compensation systems, loss absorption capacity, expanding non-interest income, and activating social contribution." Vice Chairman Kim stated, "I think financial stability and consumer protection are more important than before," and "Emphasizing the public nature of banks does not mean opposing competitiveness."

Regarding North Korea risk and interest rates, Vice Chairman Kim said, "There is indeed a North Korea risk, but I do not think it is the main reason for the Korea discount," adding, "I do not think a significant problem will arise if the interest rate gap with the U.S. widens further, but since the U.S. is likely to raise rates more, we are watching carefully."

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