Investors who borrow stocks for the purpose of covered short selling are required to report the details of the transaction to the Financial Supervisory Service on the 90th day of the transaction.
The Financial Services Commission announced that the Regulations on Financial Investment Business would be revised next month so that details on stock lending and borrowing for the purpose of covered short selling must be reported to the Financial Supervisory Service on the 90th day of the transaction.
The commission decided to revise the regulations as many individual investors suspect that institutional investors and foreign investors maintaining their short selling positions for long after stock borrowing may have purposes other than short selling.
According to the commission, the content of the revision also includes reporting outstanding short selling positions together with lending and borrowing information and adjusting the minimum short selling collateral applied to individual investors from 140% to 120%.
According to industry sources, the financial authorities are considering a complete ban on short selling in the event of further market instability.