South Korea will fully reinstate short selling across all 2,700 listed stocks from March 31, ending a 17-month ban that regulators introduced in Nov. 2023 to curb illegal trading practices and protect retail investors, the Financial Services Commission (FSC) reportedly announced Monday. The government said it has completed regulatory revisions and system upgrades to enhance oversight and prevent market distortions.

To limit excessive volatility, the FSC will temporarily expand the designation of “overheated short-selling stocks,” allowing authorities to halt trading on equities that experience sharp increases in short-selling volume. Regulators said the move aims to prevent market instability, particularly for mid- and small-cap stocks that may face concentrated short-selling pressure.