The Korea Exchange (KRX) has recently initiated a development project to establish a central inspection system for short selling, reports BusinessKorea. The goal is to launch the short selling computer system by the end of March next year, with the aim of consistently detecting illegal short selling, specifically naked short selling across all sell orders.
The exchange plans to allocate approximately 1.4 billion won ($1.0mn) to establish three independent systems for collecting, processing, and managing short selling balance information. First, it will gather and input daily individual investor short selling balances, transaction history changes, and real-time trading data into the system.
In addition, the industry is actively preparing related systems. With the government deciding to limit the repayment period of collateral loans for institutional short selling to 90 days, similar to individuals, there are plans to develop a system to enforce this restriction and conduct a pilot run around October.