Prime Minister Jeong Sye-gyun (pictured) said on the 20th, “It is not desirable to resume short selling without prior system improvement.” As the ruling party and the prime minister have discussed the issue of short selling, there is a prospect that the further extension of the ban has become a prerequisite.
Prime Minister Chung said in an interview with a broadcaster that day, “the short selling system in Korea has not been properly operated so far,” and “we need to improve or supplement the system that has been operated incorrectly.”
This remark is evaluated as a remark that puts heavy weight on the need to extend the temporary ban on short selling scheduled to end on March 15th. Prime Minister Chung emphasized that “foreigners and institutional investors do not follow the rules properly, so relatively small individuals are conscious of damage.”
However, regarding some of the claims that short selling should be completely abolished, he drew a line that “short selling has an aspect that cannot but be respected as a’global standard’ as not only Korea but all countries have it.”
The ruling Democratic Party, which is also the ruling party, has also gathered opinions on the inevitable extension of the ban on short selling. Democratic Party spokesman Shin Young-dae said on the day, “There are many opinions that the overall atmosphere within the party should extend the ban and clear the system in order to protect market liquidity and individual investors.” Spokesman Shin added, “As Chairman Eun Seong-soo said he would discuss with the National Assembly, we will conclude in that process.”
There is also a change in the airflow of the Financial Services Commission, which has proclaimed several times that it will resume short selling as scheduled from March 16th. Chairman Eun said in the ‘2021 Financial Commission’s Business Plan’ on the 18th, “If the regular National Assembly is held in February, there will be a process of listening to the opinions of the lawmakers.”
There are also observations that both inside and outside the authorities will consider extending the ban on short selling by about 3 to 6 months, as well as designating stocks that can be short sold mainly like Hong Kong.
Reporter Oh Hyeong-joo [email protected]
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