Follows SK FSC Sep. 2024 said short sales improvements were approved, #227780.
Revisions to Enforcement Decree
For short selling via multilateral trading firms, notifying the stock exchange of a short selling order via the multilateral trading firms without direct notification is permitted.
Specify the reference point for calculating the period from the announcement of the issuance plan until the determination of the conversion price or stock subscription right exercise price; apply reasons for exceptions as the same with paid-in capital increase.
Restrict the repayment period of short selling-purpose lending transactions to 90 days, up to one year including extensions, but may be set differently in the case of suspension of trading/delisting/restriction of account transfer on the repayment date.
Set the standard amount of fines at KRW 100mn for firms, KRW 50mn for individuals.
Oblige short selling firms to build internal control standards and computerized systems to prevent naked short selling; specify a cycle for verifying securities houses' naked short selling prevention measures; set the standard amount of fines at KRW 100mn.
Revisions to Regulations
Clarify that short selling shall be judged separately for funds, agency, and trust properties, market maker/liquidity provider accounts; specify details to be included in internal control standards for implementing measures against naked short selling.
Specify the duty to submit registration number of firms required to build a computer system and self-verification by securities houses not entrusting short selling orders.
Consultation Period
Comments by Dec. 31, 2024 for planned effectiveness from Mar. 31, 2025.
On Feb. 18, 2025, SK FSC said the revisions to Enforcement decree, which will be implemented from Mar. 31, 2025 have been approved by the Cabinet meeting.
Plus, the Regulations on financial investment business and relevant KRX regulations will be revised in early Mar. 2025 for planned effectiveness from Mar. 31, 2025.
The authorities will ensure improvements of the short selling system during the short selling ban period scheduled to end on Mar. 30, 2025 and prepare for its resumption.
Mar. 2025 Revisions Finalized
On Mar. 5, 2025, SK FSC published revised Regulations, effective from Mar. 31, 2025.
Regulators
SK FSC; SK GVT
Entity Types
B/D; Exch; Inv Co
Reference
RF, Nt 2025-6, 3/5/2025; Dec, Mt, PR, Trsl, 2/18/2025; CP, Nt 2024-431, 2024-435, PR, 11/21/2024; Reg, Nt 2024-50, 11/12/2024; Dec 35003, 11/12/2024; Law 20305, 2/13/2024;
