Short-selling ban aims to shield smaller investors but faces scrutiny over long-term market volatility
Citing illegal market activities that disadvantage retail investors, the South Korean government implemented a complete ban on short selling in early November that will remain in place until July 2024. While this decision has gained support from some voters, particularly those who have felt the adverse effects of short-selling, it has also prompted considerable debate.
A Korea Pro analysis indicates several critical insights. Firstly, despite the negative perception it sometimes garners, short selling is a common and generally accepted practice in global financial markets. It is typically restricted under exceptional circumstances, such as during periods of high volatility or market distress.
Citing illegal market activities that disadvantage retail investors, the South Korean government implemented a complete ban on short selling in early November that will remain in place until July 2024. While this decision has gained support from some voters, particularly those who have felt the adverse effects of short-selling, it has also prompted considerable debate.
A Korea Pro analysis indicates several critical insights. Firstly, despite the negative perception it sometimes garners, short selling is a common and generally accepted practice in global financial markets. It is typically restricted under exceptional circumstances, such as during periods of high volatility or market distress.
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