Ban on short selling will remain until credible system is ready: Yoon's office

▲ Ham Yong-il, the deputy chair of the Financial Supervisory Service (FSS), announces the interim results of illegal short selling by global investment banks during a press briefing at the FSS, in this file photo taken May 6, 2024. (Yonhap)

presidential office-short selling

Ban on short selling will remain until credible system is ready: Yoon's office

SEOUL, May 22 (Yonhap) -- South Korea will maintain the current ban on short selling until a reliable system is established to prevent illegal trading, a presidential official said Wednesday.

The Financial Supervisory Service (FSS) imposed a temporary ban on short selling in November last year to crack down on illegal short selling by global investment banks. The measure is set to remain in place through the end of June.

Hopes of lifting the ban were raised after FSS chief Lee Bok-hyun said last week during an investors' event in New York that he "hopes or plans to partially resume short selling in June."

The presidential official said Lee's remarks during his meeting with investors appeared to reflect his personal hopes and clarified that the government does not plan to resume short selling next month.

"We will not resume short selling until the issue of illegal short selling is resolved and a trustworthy system is in place. There is no change in our stance," the official told reporters.

In January, President Yoon Suk Yeol said the ban on short selling will remain in place until measures are devised to resolve short selling's harmful effects on retail investors.

During the New York event, the FSS chief said the agency is working to create a computer system for short selling, though there are some technical and legal issues to be addressed.

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