While the Financial Services Commission announced the resumption of short selling for the stocks included in the KOSPI 200 and KOSDAQ 150 from May 3, there is a movement to participate in the’stock lending termination (loan ban)’ centering on individual investors who oppose short selling have.
Stock lending means that an investor lends his or her stock to a borrower who wants it through a securities company and receives a certain commission. The commission rate is usually 0.5~1% per year.
The Korea Stock Investors Association (Han Tu-yeon) announced in the Financial Services Commission’s announcement, “It is a lame measure that the short-selling forces have not been able to break through the structure of continuing to easily take property of individual investors.” It has been criticized as “reserving work.” Celltrion and HLB, which have a large short selling balance, are also campaigning to buy stocks like Korean Game Stop.
The movement against short selling by individual investors is expanding to’termination of stock loans’. They urge each other to terminate their stock loans to prevent their stocks from being used for short selling.
In the Internet community, “stock lending is about helping you sell short. I get some commissions, but I don’t seem to know my stock price is going down. If there is a stock rental agreement, cancel it.”
They are arguing such as “Let’s lend a way to do some damage (shock) to the short selling forces”, “Services that are of no use to individuals” or “Let’s join forces to prevent lending my supplies to the short selling forces”. The community also provides detailed information on how to terminate stock loans for each securities company.
Earlier, the Financial Services Commission announced on the 4th that it would extend the ban on short selling by about a month and a half from March 15th to May 2nd. From the 3rd, the next day, KOSPI 200 and KOSDAQ 150 index constituents will resume.
|
Finance Commissioner Eun Seong-soo said in a questionnaire to the National Assembly on the 5th, “I will thoroughly prepare to resolve the criticism of the lack of surveillance on illegal short selling by May and the inclined playground.”
Chairman Eun Seong-soo attended a questionnaire on the economy of the National Assembly this afternoon and answered the question of “How are you preparing for the partial reopening of short selling on May 3?” of Democratic Party lawmaker Kim Byeong-wook. “Individual investors pointed out that short selling was not sufficiently detected and that it was a slanted playground,” said Eun.
Chairman Eun said, “The bill that compulsory storage of electronic transactions of securities companies for five years was passed last year, and the Financial Services Commission is also preparing a function to monitor the computer processing of securities companies at all times.” “This system will be completed by the end of this month It is scheduled, but until May 3rd, as long as I have time, I will do enough trial operation.”
He announced that he will take sufficient steps to resolve the point that short selling is a’tilted playground’, which is beneficial only to foreigners and institutional investors.
Chairman Eun said, “According to the point that individual investors have poor access to short selling, we are providing sufficient stocks through securities finance and fixing the system that could have been done through the existing five securities companies so that more securities companies can do it.” On the other hand, he said, “As I have gained time until May 3rd, I will check the preparation situation every day and continue to communicate with stock companies, exchanges, and market participants to prepare thoroughly.”