FSC to Strengthen Investigations into Naked Short Selling
The Securities and Futures Commission of the Financial Services Commission announced the result of its short selling investigation on Feb. 24, imposing a fine of 685 million won on 10 foreign securities companies for having violated relevant rules between January 2018 and July 2019.
Some of the companies intentionally violated naked short selling restrictions. In addition, some were negligent in managing their outstanding short selling positions or made mistakes regarding their short selling shareholdings. For example, sell orders were mistakenly placed with regard to unowned shares or sell orders were placed in advance by companies that made mistakes about the dates of new share listing and receipt.
The Financial Services Commission is planning to strengthen its investigations related to naked short selling. Specifically, an inspection will be made every month instead of every six months and uncovered cases will be dealt with more quickly.