Political Movement Variables Before Re-election
(Seoul = Yonhap News) Reporter Kim Nam-kwon = As the Financial Services Commission formalizes its goal to resume short selling in March, it is noteworthy whether it will achieve the goal amid opposition from some of the ruling party and opposition from’Donghak ants’.
It is also of interest that Eun Seong-soo, chairman of the Financial Services Commission, may have a different outcome from Hong Nam-ki and Minister of Strategy and Finance, who expressed his appreciation for the reinforcement of the stock transfer income tax standard for large shareholders due to opposition from the ruling party and Donghak Ant.
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According to the financial authorities on the 13th, the Financial Services Commission announced a policy to complete system improvement with the goal of restarting short selling in March.
It looks like the Financial Services Commission hurried to draw a line when voices from inside and outside the politics came out trying to extend the ban on short selling.
Short selling is an investment technique that realizes profit by borrowing and selling stocks when a stock price is expected to decline, and then buying and repaying stocks when the stock price goes down.
As the criticism that it is a’tilted playground’, which is disadvantageous for individual investors, the Financial Services Commission decided to come up with a plan to improve the short selling system, which was temporarily banned until March 15.
The Financial Services Commission is currently revising the system in the direction of strengthening the punishment for illegal short selling, improving the market maker system, and increasing the individual’s access to short selling.
As there is a net function of’appropriate price formation’ of short selling, the judgment that the resumption of short selling cannot be delayed indefinitely seems to have melted.
It is the goal of the financial authorities to resume short selling by creating a’flat playground’ that is not disadvantageous to individual investors through system improvement.
Resumption of short selling on the premise of system improvement seems to be the opinion of Chairman Eun.
Chairman Eun said at the National Assembly in November last year, “(The deadline for banning short selling) has been postponed until March 15, but by then, we will make everything perfect so that (short selling) can resume.”
The Financial Services Commission announced in a letter notified the day before that “the financial authorities’ official position regarding the resumption of short selling, the remarks of the chairman of the Financial Services Commission at the weekly meeting of the Financial Services Commission on Friday (8th) and the text message sent on the 11th.”
At a meeting on the 8th, Chairman Eun said, “The people have been an axis of the stock market, and the recent stock index exceeding 3,100 points is largely due to the contribution of foreign net buying.” “The Financial Services Commission continues and strengthens this positive trend. We plan to make more active efforts to do so.”
After the Financial Services Commission officially resumed short selling, the opposition from some of the ruling party and Donghak ants is increasing.
In addition, the Democratic Party’s Supreme Commissioner Yang Hyang-ja appeared on the radio the day before and compared Donghak ant as a’patriot’ and said, “The fundamental doubt about short selling has not been resolved. I will.”
Rep. Park Yong-jin of the same party said on Facebook that “there is an institutional adjustment, but the current short selling system is a slanted playground with many holes for illegal activities,” and asked the Financial Services Commission to reconsider the resumption of short selling carefully.
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Looking at the situation so far, it is moving in a similar fashion to last year’s October, when the controversy over strengthening the standard for large shareholders arose.
At that time, the Donghak ants strongly opposed the plan to lower the standard for large shareholders imposing stock transfer income tax from 1 billion won to 300 million won, and voiced that the ruling party should also be suspended.
Eventually, after consultations with the party, the requirement for major shareholders in November last year was maintained at 1 billion won.
Deputy Prime Minister Hong expressed his appreciation, saying, “I will take responsibility,” but President Moon Jae-in rejected his resignation and reconfirmed.
Some analysts say that the reality faced by Chairman Eun is slightly different from that of Deputy Prime Minister Hong in that some Democratic Party lawmakers oppose the resumption of short selling.
The postponement of the requirements for major shareholders was at the level of the Democratic Party, and the power of the opposition, the people, voiced opposition to maintaining the standards for major shareholders.
However, it is a variable that the deadline for the ban on short selling ends when only a month is not left for the April re-election.
This is because there is a possibility that each party will raise their voice over the issue of resumption of short selling, as both parties have no choice but to care about the vote of Donghak ants.
It is also an important variable that the system improvement plan that the Financial Services Commission will propose on the premise of resuming short selling, such as reinforcing illegal short selling penalties, improving the market maker system, and expanding individual short selling accessibility, is a perfect measure to relieve the anxiety of Donghak ants.
In the end, there is interest in whether Chairman Eun’s actions will result in a different conclusion from Deputy Prime Minister Hong, and political movements and Donghak ants rebelling against the resumption of short selling are considered factors that will influence the decision of the Financial Services Commission.
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2021/01/13 11:17 sent