Training on Short Selling Available for Individual investors
The short selling ban on the KOSPI 200 and KOSDAQ 150 stocks is scheduled to be lifted on May 3 after the South Korean government initiated the ban on March 16 last year.
The Financial Services Commission has taken various measures to minimize the side effects. For instance, the revised Financial Investment Services and Capital Markets Act became effective on April 6 for a stricter illegal short selling punishment. According to the act, it is subject to at least one year in prison or a fine equivalent to 300 percent to 500 percent of illegal gains. In addition, trading details must be kept for five years and short selling inspection will be conducted every month instead of every six months.
Individual investors will be given more chances to participate in short selling, too. A total of 17 securities companies will provide short selling services for them and stock lending services for them will be launched within this year by 11 other securities companies. The volume of stock lending for individual investors is scheduled to be increased from 40 billion won or so to approximately 2.4 trillion won in two years.
Individual investors without short selling experience can conduct short selling in the market after finishing the pre-training and simulation at the Korea Financial Investment Association and the Korea Exchange. Their investment limits are classified into 30 million won, 70 million won and unlimited depending on the experience.