Input 2021.01.20 17:44 | Revision 2021.01.20 18:06
Many opinions on’regulation between extension and extension’
Democratic Party Policy Committee “Possibilities are open, decided at the end of February and early March”
In addition, the Democratic Party’s assertion that “the ban on short selling should be extended” is pouring out. The official position of the financial authorities and the ruling party is that “nothing has been decided”, and as individual investors’ opposition has risen, middle-aged lawmakers, members of the National Assembly’s Political Affairs Committee, and leadership are raising their voices.
◇Review to extend short selling? “Nothing has been decided”
The Democratic Party said that it has not decided whether or not to extend the ban on short-selling of stocks ending March 15. An official from the Democratic Party’s Policy Committee met with reporters on the 20th and said, “We will decide (whether to extend the ban on short selling) while looking at the market situation. We are also preparing a plan to improve the system, so we decided to decide with the details.” “We will keep all possibilities open and decide at the end of February or early March.”
The senior vice chairman of the Liujiang Policy Committee also told reporters, “It’s too early to discuss (whether to extend),” he said. “There is a problem that it is difficult to indicate whether the transaction is short selling or not, and measures to protect domestic investors must also be prepared. “He said.
The Financial Services Commission, which announced that it would end the ban on short selling as planned, is also taking a step back. Financial committee chairman Eun Seong-soo, who has officially formulated the policy to resume short selling several times, stepped back, saying, “Nothing has been decided.” On the 19th, Chairman Eun said, “A conclusive report that the government has confirmed the resumption of short selling or has decided to extend the ban can cause great confusion in the market,” he said. “Please wait a little longer for the final decision.”
◇ 與 stubbornly insisted that the ban on short selling should be extended
All party governments are voicing that’nothing has been decided’, but the ignition of politics surrounding short selling has not extinguished. As the issue of short selling became a political issue ahead of the Mayoral elections in Seoul and Busan in April, the ruling party, which had adhered to the ‘Sinjunganism’, repeatedly claimed to extend the ban on short selling.
Rep. Song Young-gil of the 4th line said on Facebook the day before, “Once you have time to extend the ban on short selling, you must come up with an innovation plan for short selling.” Rep. Song said, “What will happen if we add a short selling attack when the shock of foreign capital churns as the stock market adjustment phase comes,” he said. “I propose to introduce the’a short selling option designation system’ to innovate the short selling system.” . As for the allowable short selling range,’stocks included in the KRX300 index consisting of 300 large stocks’ were selected.
Rep. Woo Sang-ho, who is running for the Seoul Mayor’s by-election in April, also met with reporters the day before, saying, “We need to extend the ban on short selling.” .
Earlier on the 5th, Democratic Party lawmaker Park Yong-jin said, “It is dangerous to resume short selling in March,” and said, “The Financial Services Commission should review it.” You have to seriously consider extending the ban,” he argued.
The only person inside the party insisting that short selling should be resumed was the only member of the National Assembly’s Political Affairs Committee, Ogi-hyung Oh. Rep. Oh said on Facebook on the 18th, “If we don’t want to abolish the system, we have to finally remove the temporary ban on short selling.” Rep. Kim Byung-wook, a secretary of the ruling party of the political affairs committee, expressed a neutral opinion, saying, “After a comprehensive review of the effects of system improvement, we must decide at the latest in early February.”
◇”System maintenance first”… 3-6 month extension possibility weight
It is a common argument among lawmakers in favor of the extension of the ban on short selling to minimize confusion among individual investors by first improving the related system before resuming short selling. Accordingly, there are observations that the party government is highly likely to reconcile opinions as the ban on short selling is extended for three to six months.
Spokesman Shin Young-dae met with reporters on this day and said, “It will be cleared up in the process of discussions (by the financial authorities and the National Assembly),” but said, “The overall atmosphere of our party is to protect individual investors. A) There are many opinions that the system should be extended and the system should be improved.”
The Democratic Party is planning to carefully examine whether there are any deficiencies in the improvement plan of the short selling system being promoted by the financial authorities. Currently, there are three major frameworks for improving the short selling system of the Financial Services Commission: △Intensifying the punishment for illegal short selling, △Establishing a system for detecting illegal short selling transactions, and △Expanding accessibility to short selling by individual investors.
The revised bill of the Capital Markets Act is scheduled to go into effect in April, subject to fines 3 to 5 times the profits obtained from short selling without borrowing stocks or subject to imprisonment for more than one year. A comprehensive monitoring system for detecting illegal short selling, which allows you to know whether you have borrowed after short selling, is expected to be established in the third quarter of this year. However, it is pointed out that this system alone is not enough to improve transparency. All transaction details must be computerized, such as disclosure of short sale transaction details in real time.
To expand the accessibility of short selling by individual investors, the Financial Services Commission has created a task force (TF) to discuss the extent of investment allowance. In terms of guaranteeing equal investment opportunities, short selling is allowed to individual investors, but there is no big disagreement between the party and the party, although the investment targets will be gradually expanded in consideration of risks.