{"id":2205202,"date":"2024-05-23T08:00:55","date_gmt":"2024-05-22T23:00:55","guid":{"rendered":"https:\/\/koreapro.org\/?p=2205202"},"modified":"2024-05-22T17:48:40","modified_gmt":"2024-05-22T08:48:40","slug":"south-korea-extends-short-selling-ban-pending-reliable-system-implementation","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/05\/south-korea-extends-short-selling-ban-pending-reliable-system-implementation\/","title":{"rendered":"South Korea extends short-selling ban pending \u201creliable system\u201d implementation"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">South Korea\u2019s presidential office rejected the possibility of resuming short-selling next month on Wednesday, telling reporters that it will extend the ban that was <\/span><a href=\"https:\/\/koreapro.org\/2023\/11\/south-korea-suspends-short-selling-for-8-months-despite-economists-criticism\/\"><span style=\"font-weight: 400;\">originally set to expire<\/span><\/a><span style=\"font-weight: 400;\"> in the first half of this year. The presidential office stated that short selling will not resume until a \u201creliable system\u201d is established to prevent illegal practices and protect investors.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The announcement contradicts Financial Supervisory Service (FSS) governor Lee Bok-hyun, who <\/span><a href=\"https:\/\/www.fss.or.kr\/fss\/bbs\/B0000188\/view.do?nttId=136086&amp;menuNo=200218&amp;cl1Cd=&amp;sdate=&amp;edate=&amp;searchCnd=1&amp;searchWrd=&amp;pageIndex=2\"><span style=\"font-weight: 400;\">expressed<\/span><\/a><span style=\"font-weight: 400;\"> last Thursday his personal hope for a partial resumption of short-selling in June. The presidential office clarified that this was not the government\u2019s official stance and that comprehensive measures, including tax benefits and improved corporate governance, are being developed to support listed companies.<\/span><\/p>\n<p><b>Why It Matters<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The potential extension of South Korea\u2019s short-selling ban until a reliable system is established to prevent illegal practices will likely have a significant impact on domestic and international investors. International investors will likely see an extension of the ban as South Korea\u2019s lack of commitment to free market principles, despite South Korean President Yoon Suk-yeol\u2019s <\/span><a href=\"https:\/\/koreapro.org\/2024\/05\/yoon-emphasizes-economic-growth-pension-in-first-press-meeting-in-21-months\/\"><span style=\"font-weight: 400;\">remarks<\/span><\/a><span style=\"font-weight: 400;\"> that say otherwise. This could lead to reduced foreign investment inflows or capital outflows, affecting the liquidity and performance of the South Korean stock market.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A ban on short-selling is usually imposed during a <\/span><a href=\"https:\/\/koreapro.org\/2023\/11\/why-south-korea-faces-economic-controversy-with-short-selling-ban\/\"><span style=\"font-weight: 400;\">severe economic crisis<\/span><\/a><span style=\"font-weight: 400;\">. South Korea previously banned short-selling only during major global crises, such as the 2008 subprime mortgage crisis, the 2011 European debt crisis and the 2020 global pandemic, to prevent dramatic price fluctuations. The FSS <\/span><a href=\"https:\/\/www.fss.or.kr\/fss\/bbs\/B0000188\/view.do?nttId=135810&amp;menuNo=200218&amp;cl1Cd=&amp;sdate=&amp;edate=&amp;searchCnd=1&amp;searchWrd=&amp;pageIndex=4\"><span style=\"font-weight: 400;\">stated<\/span><\/a><span style=\"font-weight: 400;\"> earlier this month said it had discovered that nine banks, including two that have already been fined (BNP Paribas and HSBC), out of 14 foreign investment banks, with trading violations totaling about $155 million (211 billion won).<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the other hand, extending the ban will likely benefit banks and large corporations by protecting them from speculative investors and reducing downward pressure on their stock prices. However, it will likely reduce market efficiency and limit investors\u2019 hedging opportunities.<\/span><\/p>\n<div class=\"content-tags\"><a href=\"https:\/\/koreapro.org\/tag\/business-economy\/\"><span class=\"tag\">Business &amp; Economy<\/span><\/a><a href=\"https:\/\/koreapro.org\/tag\/domestic-politics\/\"><span class=\"tag\">Domestic Politics<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"<p>South Korea\u2019s presidential office rejected the possibility of resuming short-selling next month on Wednesday, telling reporters that it will extend the ban that was originally set to expire in the first half of this year. The presidential office stated that short selling will not resume until a \u201creliable system\u201d is established to prevent illegal practices [&hellip;]<\/p>\n","protected":false},"author":10407,"featured_media":2205203,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[24,27],"class_list":["post-2205202","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-briefings","tag-business-economy","tag-domestic-politics"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>South Korea extends short-selling ban pending &quot;reliable system&quot; implementation - KOREA PRO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2024\/05\/south-korea-extends-short-selling-ban-pending-reliable-system-implementation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"South Korea extends short-selling ban pending \u201creliable system\u201d implementation - KOREA PRO\" \/>\n<meta property=\"og:description\" content=\"South Korea\u2019s presidential office rejected the possibility of resuming short-selling next month on Wednesday, telling reporters that it will extend the ban that was originally set to expire in the first half of this year. The presidential office stated that short selling will not resume until a \u201creliable system\u201d is established to prevent illegal practices [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/koreapro.org\/2024\/05\/south-korea-extends-short-selling-ban-pending-reliable-system-implementation\/\" \/>\n<meta property=\"og:site_name\" content=\"KOREA PRO\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/nknewsorg\/\" \/>\n<meta property=\"article:published_time\" content=\"2024-05-22T23:00:55+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-05-22T08:48:40+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/koreapro.org\/wp-content\/uploads\/sites\/6\/2024\/05\/feature-5.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1870\" \/>\n\t<meta property=\"og:image:height\" content=\"1000\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"johnleenknews\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@southkoreapro\" \/>\n<meta name=\"twitter:site\" content=\"@southkoreapro\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"KOREA PRO\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/koreapro.org\/2024\/05\/south-korea-extends-short-selling-ban-pending-reliable-system-implementation\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/koreapro.org\/2024\/05\/south-korea-extends-short-selling-ban-pending-reliable-system-implementation\/\"},\"author\":{\"name\":\"johnleenknews\",\"@id\":\"https:\/\/koreapro.org\/#\/schema\/person\/b9766dba611638edc06a6e0b7078714d\"},\"headline\":\"South Korea extends short-selling ban pending \u201creliable system\u201d implementation\",\"datePublished\":\"2024-05-22T23:00:55+00:00\",\"dateModified\":\"2024-05-22T08:48:40+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/koreapro.org\/2024\/05\/south-korea-extends-short-selling-ban-pending-reliable-system-implementation\/\"},\"wordCount\":329,\"publisher\":{\"@id\":\"https:\/\/koreapro.org\/#organization\"},\"image\":{\"@id\":\"https:\/\/koreapro.org\/2024\/05\/south-korea-extends-short-selling-ban-pending-reliable-system-implementation\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/assets.korearisk.com\/uploads\/sites\/6\/2024\/05\/feature-5.png\",\"keywords\":[\"Business &amp; 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