[서울신문] Ruling party pushing for “permanent ban on short selling”… “As expected” “Undecided” Financial Services Commission

It seems to be under strong pressure ahead of resumption on March 15th

Ahead of the resumption of short selling in March, the Democratic Party and the Financial Services Commission collided. The financial authorities argued that short selling needs to be resumed to remove the bubble in the stock market, while the ruling party sided with the arguments of individual investors who wanted a permanent ban on short selling.

In an interview with YTN radio on the 12th, Yang Hyang-ja, the Democratic Party’s Supreme Council member, said, “It is a situation that has not resolved the fundamental suspicion of short selling.” He then argued that the ban on short selling should be extended. Rep. Park Yong-jin of the same party said on Facebook that “the FSC’s attitude is irresponsible,” and “I ask the FSC to reconsider a cautious attitude and decision to resume short selling.

Short selling is a method in which stocks that are expected to fall down are sold by borrowing from a securities company, and when the stock price actually goes down, they are bought again at a lower price and paid off. Foreigners and institutions have a high proportion of short selling, but individuals are pointed out that they have less access to investment. For this reason, the financial authorities temporarily banned short selling for six months from March last year when the stock price fell due to the spread of Corona 19. Short selling is banned until March 15, after re-extension for six months.

The Financial Services Commission is in a frenzy. In a text message to reporters the day before, “the temporary ban on short selling due to Corona 19 is scheduled to end on March 15”, but as pressure from the ruling party continued, a high-ranking financial committee official said, “Nothing has been decided.” Backed down. As the controversy grew, the Financial Services Commission revisited in a text message saying, “The text sent the previous day is the official position of the financial authorities.”

With the by-election in April, the Democratic Party is likely to continue to press hard to extend the ban on short selling. In November of last year, the party government clashed over the criterion for the 1 billion won standard for stock transfer tax, but in the end, the opinion of the party representing the position of individual investors was reflected. An official from the Democratic Party said, “The issue of short selling has been discussed at the top of the list and is preparing a countermeasure.”

Reporter Kim Jin-ah [email protected]