Posted : 2021-02-01 16:15
Updated : 2021-02-02 09:13
Financial Services Commission Chairman Eun Sung-soo, second from right, fixes his gaze at Anti-Corruption and Civil Rights Commission Chairperson Jeon Hyun-heui during National Policy Committee meeting at the National Assembly on Yeouido, Seoul, Jan. 29. Yonhap
Over 60 % retail investors oppose resumption of short selling
By Lee Kyung-min
The government is expected to extend its short-selling ban for another three months until mid-June, in a move to placate retail investors seeking collective action against what they consider an extremely uneven playing field on the stock market, according to multiple sources, Monday.
The much-politicized financial investment method is being widely used by foreign and institutional investors to make profits after selling borrowed shares at a lowered price in a bear market at the expense of retail investors.
In the U.S., small investors have defied short-sellers by banding together online, renting billboards in Times Square and even flying banners from planes; in Korea, they are driving a bus.
Short Sellers Under Siege Everywhere Have It Really Bad in Korea
Bloomberg 1/29/2021
In South Korea, the government is piling on too.
Lawmakers who oversee the country’s $2 trillion stock market are discussing plans to extend one of the world’s longest bans on short selling, amid pressure from mom-and-pop punters who drive more than two thirds of daily trading.
Calls to make the 10-month ban permanent are mounting. More than 203,000 people have signed a petition imploring President Moon Jae-in to make short sales illegal crossing a threshold of 200,000 that compels him to provide an official response. Moon’s prime minister has already called the practice “undesirable.”
Posted : 2021-01-27 16:31
Updated : 2021-01-27 20:43
Members of the Korea Stockholders Alliance hold a rally in front of Government Complex Seoul, Wednesday, to call for a complete ban on stock short-selling. / Yonhap
By Park Jae-hyuk
Mirae Asset Daewoo, Samsung Securities and Korea Investment & Securities are considering giving retail investors wider access to short-selling by lending them stocks for the investment method that bets on the price fall of the borrowed shares, according to industry sources, Wednesday.
Short-selling refers to a method in which an investor sells borrowed shares in the belief that the price will fall and they will be able to buy the shares back at a discount, keeping the difference and returning the borrowed shares.
By Lee Kyung-min
A ban on short-selling, an emergency measure put in place in March 2020 to help create a floor for the then-plummeting stock market at the beginning of the COVID-19 pandemic, is increasingly becoming a political issue ahead of the upcoming by-elections in April.
Ruling party lawmakers are stepping up their push for an extension of the ban set to expire March 15, despite Monday s announcement by the Financial Services Commission (FSC) that made clear it will allow the resumption of the financial investment method.
Whether the financial authorities will make a policy course correction remains to be seen as the FSC has yet to produce any material improvement in strengthening the punishment for illegal short-selling and granting greater accessibility for individual investors to the financial investment method.