The Financial Supervisory Service (FSS) announced on Jan. 4 that it has uncovered additional evidence of illegal short selling amounting to tens of billions of won, following the detection of naked short selling by global investment banks BNP Paribas and HSBC.
In a New Year’s press conference for in-house reporters on Jan. 4, FSS Director Lee Bok-hyun stated, “During the ongoing investigation of illegal short selling by overseas investment banks conducted by the FSS, additional evidence of illegal short selling, amounting to tens of billions of won, has been confirmed from various investment banks. Some of the related cases are in the later stages of the investigation process.”
He further mentioned, “It is challenging to set a deadline, but from the perspective of the FSS, it can be said that the investigation is almost concluding for at least some of the major cases.”
The director added, “It is possible to expedite the investigation. However, we are listening to their stories to ensure that there are no overlooked aspects by the FSS since the identified global investment banks are also part of the South Korean financial market. Soon, we will explain the details to the public and ensure that it can be reflected in the ongoing improvements to the short selling system.”
Regarding concerns from foreign investors that South Korea’s short-selling regulations are too stringent, he said, “To build market confidence we are planning to explain the characteristics of the South Korean financial market and its concerns, especially in regions and financial institutions closely related to the current highlighted issues such as Hong Kong. Whether in the form of investor relations or a common explanation from supervisory bodies, we are in the process of preparing as part of our international efforts.”