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(Seoul = Yonhap News) Reporter Kim A-ram = In preparation for the resumption of short selling, the Korea Exchange is accelerating the development of an illegal short selling detection system.
According to the financial investment industry on the 2nd, the exchange is building a system to detect illegal short selling by monitoring the flow of short selling in real time with the goal of closing in February.
Borrowed short selling by borrowing stocks with margin is permitted, but unborrowing short selling without borrowing stocks first is illegal.
However, it has been difficult to respond quickly because there is no computer infrastructure that can monitor suspicious transactions in real-time on exchanges even if illegal short sales have been made.
Accordingly, it was decided to establish a system to monitor abnormal transactions in real time by monitoring the bid price of short selling submitted by securities companies to the exchange.
Initially, the exchange planned to complete system development and related regulations maintenance by February so that it could start operation immediately when short selling resumes in mid-March.
It is also discussed that the end of the short sale ban will be extended from March 15 to June, but the exchange is working on the existing plan.
A related exchange official said, “It will be known when the system development will be completed, but we are proceeding according to the original schedule.”
The Special Supervision Team, an organization dedicated to supervising short sales, newly established under the Supervision Department of the Market Supervision Headquarters, is planning to operate an illegal short sales detection system.
At a press conference on the 26th of last month, Son Byung-du, chairman of the exchange, said, “We plan to improve the system centering on the management of short selling by market makers and quickly establish a detection system to eradicate illegal short selling to restore market confidence in short selling”
Until now, the fact that it is illegal in the domestic stock market has steadily raised voices that it is necessary to strengthen surveillance and punishment due to the spread of non-borrowing short selling.
According to the data submitted by the Financial Supervisory Service to the Democratic Party’s Rep. Kim Byeong-wook, a member of the National Assembly’s Political Affairs Committee, 101 financial companies were sanctioned for illegal short selling in the 10 years from 2010 to 2019.
Among them, 94 foreign-affiliated financial companies were mostly, and 7 were domestic financial companies. The sanctions were all limited to the level of’cotton bat’ due to fines and caution.
As individual investors are increasingly opposing the resumption of short selling in March, the possibility of financial authorities extending the ban on short selling for three months is weighing on.
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2021/02/02 06:32 sent