On 16 January 2024, the FSS issued a response to Bloomberg’s Article on
Illegal Short Sales in South Korea (Jan 15, 2024).

• Bloomberg argued in its article that illegal short selling is not rampant in South Korea as the total illegal short selling by the recently detected four global investment banks is equivalent to 0.001% of Korea’s annual trades in 2022 and 2023.
• Given that illegal short selling hinders the formation of fair pricing and increases the short-term volatility of a certain stock, it is necessary to consider the impact of illegal short selling on an individual stock. The Financial Supervisory Service found that the violation rate exceeded 20%* in some cases, which suggests that illegal transactions have a big impact on a certain stock.
  *Amount of violated orders / Daily trading value of the stock
• The FSS will spare no efforts to establish a fair market order as well as conduct a wider probe into global investment banks in a swift manner