[경제][현장영상] Seongsu Eun, Chairman of the Financial Services Commission, “Partial resuming of short selling from May 3rd”

[앵커]

The Financial Services Commission held an interim FSC meeting this afternoon to discuss whether to resume short selling.

The Financial Services Commission originally planned to apply the ban on short selling until March 15, but recently, political circles and private investors strongly requested an extension of the short selling ban, and held a temporary meeting today to discuss whether to extend the ban on short selling.

Let’s listen to the presentation of Seongsu Eun, Chairman of the Financial Services Commission.

[은성수 / 금융위원장]

Hello? This is Seongsu Eun, the chairman of the Financial Services Commission. An extraordinary financial committee was held today. The Financial Services Commission decided to partially resume short selling from May 3rd.

The stocks allowed for short selling are large stocks that make up the KOSPI 200 and KOSDAQ 150 representing the domestic stock market. This includes 200 stocks, 22% of 917 KOSPI stocks, and 150 stocks, 10% of 1470 KOSDAQ stocks.

The remaining 2037 stocks continue to be banned from short selling. After the ban on short selling on March 15, various opinions and alternatives were presented, from the request for a complete ban on the resumption of short selling, to a complete resumption, and resumption after system improvement.

At today’s meeting of the Financial Services Commission, opinions gathered that it is difficult to ban the global standard short selling completely or indefinitely in our internationally connected capital market environment.

In particular, there was an opinion that we considered the fact that short selling is the only developed country that prohibits short selling, and that short selling is an important evaluation factor when evaluating credit ratings by country by global index calculation agencies such as MSCI and FTSE.

However, as the market is concerned and concerned about the resumption of short selling, we decided to minimize the market impact through partial resumption. The partial resumption of some stocks was based on the Hong Kong-style partial short selling method and past policy experiences in which non-financial stocks first resumed short selling after the 2008 global financial crisis.

Also, please understand this in the same context as promoting a soft landing in a phased situation to prevent a lending cliff from occurring even in extending the maturity of loans, which is the countermeasure to stabilize the Corona market.

The resumption of short selling of KOSPI 200 and KOSDAQ 150 stocks was set as May 3, 2021, taking into account the computer development and testing period of the Korea Exchange.

As the revised Capital Market Act, which aims to strengthen the punishment for illegal short selling, is scheduled to take effect on April 6, there will be no legislative gap. At today’s Financial Services Commission meeting, investors agreed on the need to improve the short selling system as there are demands from investors for the transparency and fairness of the short selling market.

The Financial Services Commission will ensure that there is no negligence in improving the system for problems pointed out by market participants prior to the resumption of short selling on May 3rd. First of all, we will take root in the perception that illegal short selling can always be caught and punished.

In order to prevent illegal short selling attempts in advance, through the revision of the Capital Markets Act at the end of last year, short selling investors are obligated to retain information on lending transactions for short selling purposes for 5 years, and the brokerage brokerage directly confirms whether the investor has illegal short selling.

Currently, related institutions such as securities companies and loan brokerage agencies are pursuing system construction work without disruption in accordance with the law enforcement date on April 6, 2021 and the resumption schedule of the short sale on May 3, 2021.

The exchange’s market monitoring function will also be expanded throughout. A dedicated organization to inspect illegal short selling will be launched within this month, and the detection cycle for non-arbitrary short selling will be shortened from 6 months to 1 month.

[저작권자(c) YTN & YTN plus 무단전재 및 재배포 금지]