Input 2021.01.24 13:44
“Introduction of a system to block pre-loan short selling…Strengthening responsibility for securities companies”
Regarding the ban on short selling of stocks ending March 24, Park Yong-jin, a member of the Democratic Party, said, “Resumption of short selling is possible only when the market process is established.” Rep. Park held a press conference at the National Assembly on that day and said, “Financial authorities must strictly punish illegal activities and devise specific measures to prevent recurrence.”
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Rep. Park said, “The Financial Services Commission is suspicious of concealing the case by ignoring the usual procedures in this investigation and’passing’ the Financial Supervisory Service.” “According to the normal procedure, the FSS should be included in the investigation process, but the Financial Supervisory Service It was excluded from the entire process such as case investigation assignment and result notification.”
Rep. Park said, “The Financial Supervisory Service is also missing in relation to the improvement of the short selling system, such as the establishment of the market maker system and illegal short selling monitoring system announced in December of last year.” “We need to make sure that short selling and illegal activities can be included in the comprehensive inspection.”
Rep. Park said, “The Financial Services Commission announced in December last year that as a measure to monitor illegal short selling, △Establish a short selling monitoring system △Strengthen regular inspection △Develop new harvesting techniques △New organization, etc.” “There is a concern that the system and the extraction of transactions beyond short selling, such as pre-selling and post-borrowing, are in fact turned into an ineffective alternative by saying’continue promotion’.”
He added, “I want to supplement the current situation by introducing a’previous short-selling blocking system’,” he said. “The monitoring mentioned by the Financial Services Commission puts weight on the dimension of’post detection’. If you pay back, there is a high possibility that you will not be subject to any sanctions.”
Rep. Park said, “The legitimacy of short selling lies in’whether or not I borrowed stocks or not, but it cannot be regarded as’no problem because I paid them back later’.'” said “The amendment that I intend to propose is to strengthen the responsibility of securities companies and the obligation to confirm the short sale. The intention is to let the securities firms themselves establish a pre-monitoring system.”
Rep. Park said, “Before selling, the securities company is equipped with a computer to check whether the stock borrowed through the electronic system and then have its own electronic system that can place a sell order, while the financial authorities put in a way to put in a mandatory provision to manage and supervise it. “It also includes a clause that prevents the possibility of forgery or falsification of evidence even with illegal short selling, and punishes mediators if they violate it.”
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