Ahead of the resumption of short selling in March, politicians’putting opinions’… the ruling party has mixed pros and cons

[한국금융신문 홍승빈 기자] Opinions are also divided within the ruling Democratic Party, the ruling party, over whether the’prohibition of short selling’, which is scheduled to end on March 15, will be extended. Criticism has been raised about whether the ruling party is undermining the trust of the policy by paying attention to individual investors ahead of the coming ‘4·7 re-election by-election’.

According to the financial investment industry on the 19th, Democratic Party member Ogi-hyung Ogi-hyung, a member of the National Assembly’s Political Affairs Committee, argued through his SNS on the previous day that “the ban on temporary short selling should eventually be lifted.”

In an article entitled’The short selling ban, which must be resolved in the end’, Rep. Oh said, “In a situation where most countries normally maintain the short selling system, it is truly responsible to extend the short selling ban again in the name of’protecting individual investors’. “Is it an attitude?”

“If the ban on short selling is extended again despite the system supplementary measures established by the National Assembly and the government, when and for what reason will the ban on short selling be lifted in the future?” “If the ban on short selling continues, confidence in the Korean stock market declines. “We are concerned about side effects such as churn and increased likelihood of a share price bubble.”

He also argued, “In the short term, it may seem like that (individual investor protection) and gain favorable response from individual investors, but the formation of an excessive stock price bubble or infringement of the efficiency of the capital market can cause great damage to individual investors.” did.

This is the first claim to allow short selling amid recent discussions within the Democratic Party over whether to lift the ban on short selling. Earlier, Democratic Party lawmakers such as Park Yong-jin, Yang Hyang-ja, and Kim Byeong-wook have voiced opposition to the financial authorities’ policy to end the temporary ban on short selling in March.

Rep. Park Yong-jin said to the Financial Services Commission on the 17th, “In line with the conclusion of the resumption of short selling in March, we are trying to promote financial policy without even a roadmap for short selling policies.” Is irresponsible.”

Rep. Park also said, “The Financial Services Commission came up with measures to improve the short selling system several times in 2013 and 2017, but the market is questioning its effectiveness.” “I am also responsible for securities companies in the middle of illegal activities by improving the system. I have to ask.”

Yang Hyang-ja Choi said on the 11th, “Individual investors are very concerned that the ban on short selling is lifted. I understand that short selling encourages stock prices to decline, and the damage caused by this is the personal responsibility.”

Rep. Yang said, “If the policy cannot relieve such anxiety, we must consider extending the ban on short selling. We must discuss it promptly and carefully so that the market can prepare for an answer at the latest in January.” .

Rep. Kim Byung-wook, secretary of the Democratic Party, along with the National Assembly’s Political Affairs Committee in charge of the Financial Services Commission, also expressed an opinion that “the short selling should not be reopened blindly.”

Rep. Kim Byeong-wook explained, “It is true that there is no objective evidence that the market has led to stock price manipulation through short selling in the debate on short selling.” If system improvement is insufficient, it means that the ban on short selling should be extended further.

As a result, the Financial Services Commission, which maintained its position to resume short selling, seems to step back. It’s a different move from last week, when it showed strong willingness to resume despite requests for extension of ban on individual investors and political circles.

Eun SeongsucloseEun SeongsuCollect articles The chairman of the Financial Services Commission said on the previous day through the ‘2021 Business Plan of the Financial Services Commission. Please wait until the final decision is made.” He said that February is the most likely time to decide whether to resume short selling.

Chairman Eun said, “Short selling has been decided at a meeting of the Financial Services Commission consisting of nine people, and will continue to do so,” he said. “I hope you understand that I cannot speak definitively.”

However, a line was drawn on the discussions with the politicians regarding whether to resume short selling.

Chairman Eun said, “There is no discussion with the ruling party or other political parties (regarding the short sale). “When the regular National Assembly is held in February, we can talk to the lawmakers at that time, but we do not discuss or give opinions.”

He added, “I am thinking that it will be the process of listening mainly,” he added, “Please wait carefully until the final decision is made.”

Reporter Seungbin Hong [email protected]