• SK FSS and KRX announced a plan to run the naked short-selling detection system (NSDS) following the expected full resumption of short selling from Mar. 31, 2025.
• Follows SK FSC 21 March 2025 announced short selling resumption.

Overview of System

• The NSDS will constantly monitor sell orders of short selling firms through the time-based balance calculation function, thereby immediately detecting illegal short selling.
• On the other hand, the internal balance management system established by short selling firms will calculate the sellable balance for each stock in real time by short selling registration number and pre-emptively block sell orders exceeding the balance.
• 107 firms will resume short selling from 31 March 2025; 21 of these firms adopted the computerized short selling method, while 86 firms adopted pre-deposit method involving depositing borrowed securities into account, then placing short selling orders.

Future Plans

• SK FSS, KRX, SK FIA will promptly establish a short selling computer system through a cooperative system with related entities, advance the short selling computer system based on the NSDS, the feedback system of the internal balance management system.
• Firms can initiate short selling transactions once they meet the standards and requirements for preventing naked short selling under revised Capital markets act.
• KRX will operate linkage tests and mock markets on a monthly basis even after April 2025, in order to support the continued expansion of short selling computerization.
• Companies wishing to participate must have a complete internal balance management system and receive a short selling registration number from SK FSS in advance.
• KRX will determine whether institutional investors meet the qualification requirements by conducting strict screening with regard to linked tests and mock markets