Article: Regulator to take stern actions against illegal short selling

Article - Media, Publications

Regulator to take stern actions against illegal short selling

Yonhap, 03 May 2021

South Korea’s financial regulator said Monday the country will take stern actions against illegal activities involving stock short selling as it allowed a partial resumption of short selling after a 14-month ban.

The Financial Services Commission (FSC) partially lifted its ban on short selling of some listed stocks after it imposed a six-month ban on the trading strategy in March last year and later extended it to ease market routs caused by the pandemic.

Short selling is a trading strategy in which investors sell stocks they borrowed on the belief that share prices will fall in the near future. When the prices decline, they can buy back the stocks at lower prices, pocket the profit and return the shares to the original owner. Continue reading “Article: Regulator to take stern actions against illegal short selling”

Article: Tougher penalties come into force for naked short selling

Article - Media, Publications

Tougher penalties come into force for naked short selling

Choi Jae-hee, 06 April 2021

Investors engaged in naked short selling will be fined up to 100 percent of their order amount, the nation’s top financial regulator said Tuesday.

According to the policymaking Financial Services Commission, the revised Capital Markets Act, which imposes tougher penalties for naked short selling, has taken effect on the same day.

Short selling is a trading tactic where investors immediately sell borrowed stocks on a bet that share prices will fall, allowing them to later repurchase stocks and return them to the lender. Some investors sell stocks without borrowing, known as “naked” short selling, which is currently illegal in the local capital market. Continue reading “Article: Tougher penalties come into force for naked short selling”