Financial authorities ask institutional investors to refrain from market-destablizing trading

financial authorities-institutional investors

Financial authorities ask institutional investors to refrain from market-destablizing trading

SEOUL, Oct. 28 (Yonhap) -- South Korea's financial authorities called for cooperation from institutional investors, including the state pension operator, to refrain from stock trading that could heighten market swings, sources said Friday.

The request came as financial market volatility has been mounting in the wake of a recent default on a municipal government-guaranteed debt raised to fund the construction of the Legoland theme park in the eastern province of Gangwon.

According to the sources, the Financial Services Commission, the Financial Supervisory Service and the finance ministry held a hastily arranged meeting Thursday in Seoul with officials from around 10 major institutional investors.

The investors in attendance included the National Pension Service, Teachers' Pension, and the Land and Housing Corp.

During the meeting, the financial authorities asked for their cooperation in easing market swings by refraining from excessive "trend-following" trading and fund redemption that could prompt serious market swings, the sources said.

"It was a meeting where we asked for their restraint from excessive trend-following trading and redemption that exceeds ordinary levels," an official said on condition of anonymity, adding it was part of "preemptive" steps designed to stave off sharp market swings.

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