Korea Securities Finance Corp. (KSFC) CEO Chung Wan-kyu has pledged to improve retail investors’ access to short selling.
“We have decided to increase the number and amount of stock loans available to retail investors for short selling,” Chung said during a New Year's press conference held in Yeouido on Jan. 17.
He also announced his plans to reform the function and system of Fund Online Korea (FOK), which was acquired last year, to make it profitable within three years.
Regarding short selling which brought about many complaints from retail investors, Chung promised to greatly expand the volume of stock loans to improve retail investors’ access to short selling.
“There is a variety of opinions ranging from the abolition of short selling to allowing retail investors to have full access to short selling. We will provide as much support to retail investors as we can,” he said.
Currently, individuals are allowed to borrow stocks from KSFC through securities firms for short sale transactions. KSFC lent 134 stocks worth 12 billion won (US$10.68 million) to retail investors as of November last year. It is planning to increase the number and amount of stock lending to 248 and 92 billion won (US$81.85 million), respectively. It is planning to borrow stocks from institutional investors for lending to retail short sellers. In this way, it can lower the threshold of short selling for individual investors.
Chung also announced operational plans for FOK, the online fund sale platform acquired last year. He said FOK currently incurs a loss of 5 billion won (US$4.45 million) annually as its sales come to 4 billion won (US$3.56 million) while its operating costs stand at 10 billion won (US$8.90 million). He said it would take more than three years to turn around the company, adding, however, that KSFC will make an effort to advance the time.
He said he would diversify the funds that FOK sells to retirement pensions as well as overseas equity-type funds and reform its payment systems. He said, “The sales commissions that FOK receives are competitive as they are only one third those of other sales outlets. We will innovatively reform it so we can present a role model of the fintech industry in the capital market.” In this regard, he is also planning to consider changing the name of the company.