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South Korea to maintain ban on short selling of stocks until market improves, regulator says

by Celia

SEOUL, Nov 16 – South Korea’s financial regulator said on Thursday that a ban on short selling of stocks, imposed to promote a “level playing field” for retail and intuitive investors, will remain in place until the market environment improves sufficiently.

Kim So-young, vice chairwoman of the Financial Services Commission (FSC), made the comments after a meeting with other financial authorities and lawmakers to discuss regulatory improvements, according to local media News1 and Newsis.

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In a separate statement released after the meeting, the FSC said several measures were discussed to level the playing field between retail and institutional investors and prevent illegal trading.

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These included relaxing the limit on retail borrowing of shares for short selling and imposing a maximum borrowing period for institutional and foreign investors, the FSC said.

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Retail investors have welcomed the ban on short selling, arguing that the practice has only exacerbated price volatility by allowing big players to bet on market falls.

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