S.Korea to re-impose stock short-selling ban through June to ‘level playing field’
© Reuters. A journalist walks previous an electronic board of the Korea Composite Stock Ticket Index (KOSPI) at the Korea Alternate (KRX) in Seoul, South Korea, January 20, 2016 REUTERS/Kim Hong-Ji/File Characterize
By Jack Kim
SEOUL (Reuters) -South Korea from Monday will re-impose a ban on immediate-selling shares at the least till June to advertise a “level playing field” for retail and institutional investors, monetary authorities said on Sunday.
The ban became lifted in Would possibly maybe maybe 2021 for trades engaging the shares of companies with gargantuan market capitalisation incorporated within the KOSPI200 and KOSDAQ150 share label indices. The restriction has remained in impart for many other stocks.
Brief-selling involves selling borrowed shares to aquire support at a decrease label and pocket the incompatibility.
“The measure is geared towards basically easing ‘the tilted playing field’ between institutional and retail investors,” Financial Products and services Commission (FSC) Chairman Kim Joo-hyun told a news briefing.
“Amid persisted uncertainty in monetary markets, important foreign places investment banks had been engaged as a matter of verbalize in unfair trades … and we obvious that it might per chance maybe truly be inconceivable to support handsome trading self-discipline,” Kim said.
The FSC will review market say in June to remember of whether or no longer there is fundamental improvement to enable the ban to be lifted, he said.
The regulator final week said it would set up a bunch of investigators to probe immediate-selling by foreign places investment banks for unlawful say including so-called bare immediate-selling.
Bare immediate-selling – whereby an investor immediate-sells shares with out first borrowing them or figuring out they’ll also be borrowed – is banned in South Korea.
The Financial Supervisory Carrier in October said it would probably fine two Hong Kong-basically based solely investment banks it obvious had engaged in bare immediate-selling transactions worth 40 billion acquired ($29.58 million) and 16 billion acquired respectively.
Earlier within the one year, the regulator fined 5 foreign places companies including Credit Suisse for bare immediate-selling.
Officials and market watchers alike non-public cited uncertainty around immediate-selling regulations as among factors needing to be resolved for influential index supplier MSCI to toughen South Korea to developed-market position.
