The Financial Services Commission promotes increased access to individual investors for short selling and strengthened penalties for violations

In the first half of this year, measures to improve the system will be promoted, such as increasing the accessibility of short selling for individual investors. The inspection period for non-borrowing short sales is reduced to one month, and illegal short sales detection and penalties are strengthened.

On the 19th, the Financial Services Commission announced a work plan for 2021 that contained these details. The plan is to improve fairness in the stock market by improving the short selling system.

First of all, in the first half of this year, the company plans to announce measures to strengthen the accessibility of short selling by individual investors, such as securing stock loans for individuals and providing a borrowing window.

The market maker system will also be improved, such as the exclusion of high-liquidity stock market creation and the ban on short selling of mini KOSPI 200 futures. Market makers’ short selling is reduced to half the current level.

The inspection period for non-borrowing short selling is shortened from 6 months to 1 month. It was decided to strengthen the detection and punishment of illegal short selling by strengthening the market surveillance for short selling, including the development of detection techniques.

The purpose of short selling is that it is obligatory to store loan transaction information for 5 years, and a plan to check it by computer rather than manual is also underway.

Financial Commissioner Eun Seong-soo said, “Through recent revisions to the law, it is possible to impose penalties for illegal short selling up to the maximum order amount, and criminal punishment such as imprisonment for more than one year has become possible.” “We are also building a computer system.”

He added, “The short selling of market makers who are concerned about system abuse is reduced to the current half level, and improvement measures to expand short selling opportunities for individual investors are also being prepared along with measures to protect investors.”

On the other hand, whether to resume short selling is expected to be announced in February.

Chairman Eun said, “There is no discussion with the political circles such as the ruling party, and when the regular National Assembly in February is held, I think it will be a process of listening, rather than discussing or giving out opinions,” he said. .