Short selling ban extended weight… As soon as possible, I will conclude before the Lunar New Year

Weight is being placed on the possibility of extending the’temporary ban on short selling’, centering on the politics. In addition, it is expected that the Democratic Party and the Financial Services Commission will reorganize their basic position on short selling as soon as possible through consultations with the party government before the Lunar New Year holiday.

According to the Democratic Party and the securities industry on the 24th, various institutional improvements are being made to resume short selling, but there is a consensus that the improvement of the system is not easy to finish by March 16, when the resumption is scheduled.

An official from the Democratic Party’s Political Affairs Committee said, “After creating an environment where individuals do not distrust the short-selling system, they should openly resume it,” he said. “Considering the current preparation situation, resuming on March 16 is easy to buy backlash.”

In this atmosphere, a plan to extend the ban on short selling for an additional 3 to 6 months, and a plan to resume step-by-step with large-cap stocks are being discussed.

Above all, since the enforcement date of the amendment to the Capital Markets Act, which strengthens the punishment for illegal short selling, is April 6th, the fact that a 20-day supervisory gap may occur when short selling is resumed, which supports the’prolongation of short selling ban’.

Although the amendment contains details of imprisonment for one year or more in case of illegal short selling or a fine of 3 to 5 times the profits from illegal activities, it is pointed out that the previous regulation, which has a weaker penalties for resuming short selling as scheduled, must be applied for a certain period of time. .

There were no clear announcements about personal short selling or accessibility enhancement, which is another axis of system improvement.

The Financial Services Commission is considering a plan to increase the size of rental stocks (large stocks) that individuals will use for short selling to about 20 times the current level. It plans to increase the number of securities companies that handle individual lending services from six to ten, and then build a real-time integrated transaction system between Korea Securities Finance and securities firms by the end of September to significantly expand the available stocks and stocks.

In order to protect investors, the qualification requirements for short-selling investments and the corresponding investment limits are being discussed together, but there are no information on the market yet. The development of a comprehensive monitoring system that aggregates the size of short selling and top stocks of the entire intraday market in real time is also aiming for the third quarter.

The Financial Services Commission seemed to officially resumption on two occasions, stating that the ban on temporary short selling is scheduled to end on March 15, but as voices that the system was insufficiently supplemented,’nothing has been decided’. It took the shape of retreating. Since then, officials from the Financial Services Commission are continuing to haunt the short sale issue.

However, under the judgment that the uncertainty related to short selling has grown excessively, it is known that there is a high possibility that the party will decide the basic direction on whether to extend the ban on short selling through consultations with the party policy before the Lunar New Year holiday.

The final announcement is made through a resolution of the Financial Services Commission consisting of 9 members including the chairman of the Financial Services Commission. There is also an atmosphere that is wary of the inaccurate remarks of individual lawmakers continuing until the position is decided.

Democratic Party lawmaker Kim Byeong-wook, secretary of the ruling party of the Political Affairs Committee, said, “We have been revising the law and improving the system to improve the problems of the existing short selling system, and we are preparing a system to implement this in the market.” “You can’t do it,” he said.