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.
Get 30 days
of free access to
KoreaPro
-
Full access to all analysis
-
The KOREA PRO newsletter, every business day
-
Daily analysis on the top story of the day
-
The ability to suggest topics for coverage by our specialist team
Be smart about South Korea
Get full access to expert analysis and opinion.
Start
now
No charges during your trial. Cancel anytime. A paid subscription will start after 30 days.
© Korea Risk Group. All rights reserved.
No part of this content may be reproduced, distributed, or used for
commercial purposes without prior written permission from Korea Risk
Group.