2024-01-15 03:36:30
Stock news 10:27 a.m. 2024-01-15
South Korea’s Financial Services Commission (FSC) has found two more major global investment banks guilty of naked short selling on the South Korean stock market. The amount is as high as USD 41 billion. The FSC will take action to punish the two investment banks. However, the names of the investment banks have not been revealed at this time.
FSC states that Naked Short Selling is a violation of South Korea’s capital market law. This damages the stock market and undermines the credibility of investors, and the FSC will take action by fining both investment banks.
FSC Chairman Kim Ju-hyun said, “Issuing the short-selling ban aims to improve the regulations and trading system in the stock market. To create equality between retail investors and institutional investors. In the past We found that there were foreign investment banks doing Naked Short Selling, which is an illegal practice. and affect confidence in the South Korean stock market.”
In late December last year, the FSC slapped HSBC Holdings and BNP Paribas with fines of at least 10 billion won (US$7.7 million). ) in the offense of Naked Short Selling
Naked Short Selling means selling short stocks that have not been borrowed before, or in other words, Short selling stocks without the investor actually holding the shares. This is prohibited according to the South Korean capital market law.
The South Korean government launched an investigation into short selling of stocks by major brokerage firms and branches of foreign companies in August. 2022 as part of efforts to tighten oversight of short selling. By that time South Korean President Yoon Seok-yeol has ordered a comprehensive investigation into stock short-selling. After many South Korean retail investors complained that Short selling of stocks is one of the reasons why the South Korean stock market fell sharply.
By InfoQuest News Agency (15 Jan. ’24)
Tags: South Korean stock market, investment banking, South Korea
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