Lee Bok-hyun to Hear Opinions on 'Short Selling Computerization' at Korea Economic Federation

Lee Bok-hyun, Governor of the Financial Supervisory Service, is delivering opening remarks at the Research Institute Heads Meeting held on the 28th at the Kensington Hotel in Yeouido, Yeongdeungpo-gu, Seoul. Photo by Jo Yong-jun jun21@

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On the 13th, Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), will meet with Park Soon-hyuk, a writer famous as the 'Battery Uncle,' and Jung Eui-jung, CEO of the Korea Stock Investors Association, at the Korea Economic Association (formerly the Federation of Korean Industries) to hear their opinions on improving the short-selling system. The discussion will cover various topics, from issues such as the computerization of short selling to resolving the Korea discount (undervaluation of the Korean stock market).

According to financial authorities and the financial investment industry on the 6th, the FSS will hold a 'Short Selling Forum' on the 13th from 10 a.m. at the 3rd floor of the Korea Economic Association, chaired by Governor Lee Bok-hyun. Originally planned to last 60 minutes, the session was extended to 90 minutes to accommodate diverse opinions from individual investors.

The forum will include participation from 2 to 3 domestic and foreign securities firms, as well as academic experts. CEO Jung Eui-jung and writer Park Soon-hyuk will also attend and speak about the establishment of a computerized short-selling system. It is known that discussions will freely cover not only improvements to the short-selling system but also issues related to capital market advancement, such as ways to resolve the Korea discount.

This is the first time the FSS is directly hosting a forum related to the 'short selling' issue. Within the industry and among individual investors, Governor Lee’s attendance at the short-selling forum is being regarded as an unusual move. An FSS official explained, "Governor Lee stated on a KBS current affairs program on the 4th of last month that he would directly listen to individual investors' opinions regarding short selling," adding, "This forum attendance is part of that effort."

However, Governor Lee will not participate as a panelist in the forum. It is also reported that he will not deliver a congratulatory or opening speech. Instead, there is speculation that he may comment on the progress of the computerized short-selling system establishment.

The Financial Services Commission and the FSS have been discussing plans to build a computerized system for naked short selling after a temporary full ban on short selling last year. The FSS is leading a task force (TF) on 'Establishing a Computerized System for Naked Short Selling' to review ways to realize the system.

The establishment of a computerized system for naked short selling was discussed in 2020. At that time, the National Assembly’s Political Affairs Committee agreed that building a system to block naked short selling in real time would be difficult. However, individual investors argue that illegal short selling should be fundamentally blocked through real-time stock balance trading monitoring systems.

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