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Finance Commissioner Eun Seong-soo announced on the 14th that the policy effect can be achieved through reinforced penalties and a post detection system in relation to the prevention of illegal short selling. He explained that the real-time monitoring system, which has been promoted since 2018, is difficult to introduce because it requires excessive resources compared to its effectiveness.
Chairman Eun said at the 2020 entry and exit reporter group meeting held on the same day, “Under the premise that illegal short selling is severely punished, building a post detection system alone can achieve 90% or more of the government’s intended purpose.”
He said, “I also said that I would review it at the National Assembly, and in the meantime, I met with officials such as the market, the Korea Exchange, and Koscom and individual investors to examine the possibility,” he said. “It is not impossible in the current computer system, and if all information is put in ( “We can build a system), but there were opinions about whether it was too much effort and the need to do so.”
Chairman Eun emphasized that as the revised bill of the Capital Markets Act was passed in the National Assembly, reinforcing the post detection system could sufficiently prevent illegal short selling. He said, “We want to strengthen the system related to short selling of the Korea Exchange and shorten the period of investigation of illegal short selling.” I think it is possible to detect it.”
On the other hand, regarding the loan system (Korean K-Lender System) for activating short selling by individual investors, he said that only investors with appropriate qualifications are considering a plan to participate. Chairman Eun said, “As a result of collecting opinions through public hearings and private meetings, there seems to be a divergence of opinions among investors. Rather than allowing short selling to all investors, we set conditions like private equity investments, so we have experience and assets. It will be a compromise to expand to investors.”
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