On 16 November 2023, SK FSC and SK FSS attended a meeting on short selling reform measures with the private sector, the ruling party, and the government.
- Participants discussed a direction for improvements to the short selling system, which aims to level the playing field, prevent naked short sales in advance, strengthen detection, punishment of illegal short selling, expand short sale disclosure.
- Proposed measures include: set the stock repayment period for institutional investors as 90 days, reduce the margin requirement for retail investors to 105%, while the collateral ratio for KOSPI200 stocks remain the same as the current level at 120%.
- Require institutional investors to set up an internal computing system for managing their short positions, relevant standards for internal control, exemption to be granted.
- Oblige securities companies to check institutional investors’ internal systems prior to allowing them to submit short sale orders, report their verification results SK FSS.
- A special investigation unit will carry out a thorough inspection on major global investment banks, impose strict penalties against any illegal activities.
- Strengthen the threshold for disclosure requirement to the level of that for reporting requirement, which is 0.01% or more of the total issued shares, or KRW 1bn or more.
- The authorities will continue to have discussions at the National Assembly, collect public opinions, consider additional measures that may arise in the process.