Requiring Brokerages to Set up Computerized Short Selling Systems
Democratic Party of Korea lawmaker Park Yong-jin tabled an amendment to the Financial Investment Services and Capital Markets Act early this month so that securities companies entrusted with short selling must establish computerized short selling systems and the Financial Services Commission must act as a supervisor.
Another amendment to the act for monitoring system establishment for illegal short selling prevention recently foundered. According to the latest amendment, non-use of the computerized system is subject to punishment.
Securities companies are objecting to the amendment, claiming that it is an excessive demand for them to be responsible in the event of illegal short selling. “Any illegality related to short selling must be the responsibility of the entity that does it instead of a trustee,” one of them said.