With the issues surrounding the computerization of short selling and the comprehensive investigation into global investment banks (IBs) not yet completely resolved, financial authorities are poised to start discussions on the resumption of short selling, writes BusinessKorea.
The possibility of financial authorities partially resuming short selling next month is gaining momentum. This is because authorities are meeting with global IBs in person to discuss measures for improving the short selling system, and additionally, Financial Services Commission (FSC) chair Lee Bok-hyun has even mentioned a specific timeline for the resumption.
During a meeting with reporters following the overseas investor relations (IR) conference held in New York chair Lee Bok-hyun stated, “My personal desire or plan is to partially resume short selling sometime in June” even if there are technical or institutional shortcomings associated with its resumption.
He explained, “It technically takes time and there are legal issues in establishing a centralized management system at the exchange for collecting short selling balances of each institutional investor.” However, he added, “We are considering alternatives that can be pursued without legislative amendments.”
While chair Lee was hinting at the possibility of resuming short selling in New York, vice chair Ham Yong-il of the capital markets and accounting division of the FSC held a meeting with a total of 13 executives from seven global IBs in the Asia-Pacific region in Hong Kong. During this meeting, he urged cooperation from the global IBs in establishing short selling computer systems and in cooperating with short selling investigations.