Yongjin Park “Resume short selling after system improvement… The roadmap should be clear”

-On the 24th, Democratic Party lawmaker Park Yong-jin said, “At the current level, it is appropriate to extend the ban on short selling,” and urged the renewal of short selling, which will resume in March.

Rep. Park held a press conference at the National Assembly on the morning of that day and said as a prerequisite for the resumption of short selling, he pointed out that, as a prerequisite for the resumption of short selling, it must be “complete, or (at least) a clear roadmap for the point that is being pointed out and needs institutional improvement of short selling known by the Financial Services Commission.” did.

At the same time, he announced that he would soon propose an amendment to the’Capital Markets and Financial Investment Business Act (Capital Markets Act)’, which made it mandatory to establish a preliminary monitoring system for short selling on the computer of securities companies.

Regarding the purpose of the bill, Congressman Park explained, “We intend to supplement the current situation by introducing a system to block short selling in advance.” The amendment is intended to allow securities companies to establish a preliminary monitoring system by themselves in order to strengthen the responsibility of securities companies and the obligation to confirm short sales. He said, “Before selling, a securities company is equipped with a computer to check whether or not the stock borrowed through the electronic system, and then have its own electronic system to place a sell order, while the financial authorities put in a mandate to manage and supervise it. He said, “It includes a provision that prevents the possibility of forgery or falsification of evidence in case of illegal short selling, and also punishes intermediaries when violating this.”

Regarding the Financial Services Commission, “The investigation of illegal short selling by market makers announced by the Financial Services Commission in December of last year was the first supervision since the introduction of the related system in 2016.” As such, the illegal activities of market makers had to be dealt with more firmly. It is actually concealing and reducing the illegal short selling behavior of market makers,” he criticized.

In addition, the Financial Supervisory Service raised the suspicion of passing through the Financial Supervisory Service, and urged them to sternly punish illegal short selling by market makers that were discovered before resuming the short sale ▲Re-investigate illegal short sale by the Financial Supervisory Service ▲Including the illegal short selling in the Financial Supervisory Service’s comprehensive inspection of the exchange.

Regarding the countermeasures to strengthen the detection of illegal short selling proposed by the Financial Services Commission, it is a virtually ineffective alternative to the word’continue promotion’ for the key issues such as the’Comprehensive Short Selling Status Monitoring System for the Whole Market’ and’Collecting Abnormal Short Selling Transactions such as Pre-Selling and Subsequent Borrowing’. There is still a concern that it will be reduced to the same.”

Rep. Park said, “Before the extension of the short selling ban, we need to prepare a policy to improve the system as much as possible.” “If it is not complete, the system improvement is complete, or a certain roadmap has not been confirmed, the financial authorities will reopen because the date is set. “The irresponsible attitude of the company,” he repeatedly criticized.

Regarding the method of limiting short selling from the party to’large stocks included in the KRX300 index’, it is called the “Hong Kong-style plan,” and “the dysfunction (improvement) of short selling that we are proposing is a kind of intentional illegal activity in the entire stock market. It is to find and block arbitrage short selling, not because of the difference between large and small stocks.”

“The biggest problem is that the people don’t have much memory that short selling was a net function in the Korean market. The priority is to build trust in peace,” he said. “The situation is different from Hong Kong.”

Regarding the amendment to the Capital Markets Act, “the key to improving the system is to strengthen the joint responsibility of securities companies and punishment for violations.” “The bill has now been sent to the Policy Committee. We are in discussion together, but it will not be difficult to propose. Of course, we are aiming to pass the National Assembly in February.”

[서울=뉴시스]