SEOUL, June 13 (Xinhua) -- South Korea's financial regulator on Thursday decided to extend a ban on stock short-selling for nine months in a bid to wait for the establishment of a computerized monitoring system on illegal short sales.
The prohibition of short-selling on all the listed stocks, which was launched in November 2023 and was originally scheduled to expire at the end of June, will be extended until March 30, 2025, according to the Financial Services Commission (FSC).
The FSC said in a statement that if stock short-selling is resumed without the establishment of a computerized monitoring system, large-scale illegal short sales could be repeated.
The financial watchdog uncovered naked short-selling orders worth 211.2 billion won (153.8 billion U.S. dollars) that had been made before the launch of the short-selling ban.
Short-selling refers to sale of stocks by borrowing them in anticipation of price fall, before repaying the borrowed shares when the price goes down. It has been seen as one of main culprits for the stock market rout.
Naked short-selling is considered illegal here as it gives selling orders without borrowing stocks.
The financial authorities planned to encourage institutional investors to develop its own monitoring system on stock short sales by the end of this year.
The authorities will build the Naked Short-Selling Detecting System, which allows the bourse operator Korea Exchange to monitor the stock short-selling by institutional investors by the end of March 2025. ■
