Stock shorting is completely banned on the other side of the world

RockedBuzz
By RockedBuzz 2 Min Read

South Korea introduced it’ll reimpose a ban on shorting shares beginning Monday, with the restriction anticipated to final till at the least June. According to the monetary authorities’ announcement on Sunday, the resolution was made with a view to create a fairer surroundings for each retail and institutional traders.

The ban was beforehand lifted in May 2021 for transactions associated to the shares of corporations with massive market capitalization included in the KOSPI200 and KOSDAQ150 inventory worth indexes. However, the restriction was nonetheless in place for many other shares.

Short promoting is the follow of promoting borrowed shares with the intention of shopping for them again at a lower cost, with speculators cashing in on the distinction.

Financial Services Commission (FSC) Chairman Kim Joo-hyun advised a press convention that unfair buying and selling has been a standard follow amongst main international funding banks not too long ago, elevating considerations about sustaining truthful buying and selling self-discipline. Last week, the regulator introduced plans to arrange an investigative staff tasked with investigating the unlawful actions of short-selling by international funding banks, together with so-called bare short-selling.

The FSC plans to overview the restriction in June to find out if there was important enchancment to warrant lifting the ban.

Source: Reuters

Cover picture supply: Getty Images

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