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[Alpha Biz=(Chicago) Reporter Kim Jisun] Stock market short selling transactions will be "completely suspended" from June 6 to June next year. It's been two and a half years. Financial authorities recently put a brake on short selling, citing stock market jitters.
Kim Joo-hyun, chairman of the Financial Services Commission, held an extraordinary plenary session at the Seoul Government Complex on the 5th and decided to ban the public sale altogether until the first half of next year. Short selling is a trading technique that borrows stocks, sells them, buys them later, and pays them back, and benefits from falling stock prices.
Earlier, the Financial Services Commission suspended the public sale to cope with the stock price crash following the COVID-19 incident in March 2020. Starting in May 2021, short selling has been partially allowed only for items consisting of the KOSPI 200 and KOSDAQ 150 indexes. This is the fourth time that the government has been suspended because public sales were temporarily banned during the global financial crisis in 2008 and the European financial crisis in 2011.
The ban on short selling will go into effect immediately from the 6th.
Authorities have also left open the possibility of extending the ban on short selling. "The ban on the public sale, which was decided on the same day, is until the end of June next year," a Financial Services Commission official said. "We will make the decision in consideration of the overall conditions at that time, including market trends and the implementation of measures to improve the public sale system."
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
