• SK FSS formulated the Integrated short selling guideline to enable investors to verify the illegality of short selling and launched the customized investor support system.
• Follows SK FSC, FSS June 2024 launched short sale reform measures.

Overview of Integrated Guideline

• The balance available for sale is calculated in real time by reflecting a balance change at the start of each day; where an agreement on essential terms of a loan contract is reached between lender and borrower, ownership of loaned securities is recognized.
• Where loaned securities or securities provided as collateral cannot be returned by the short sale settlement date (T+2), such transaction is considered a naked short selling.
• The deposit of securities refers to the state in which the delivery of securities is completed through a book-keeping entry in a depository's account or investor account.
• Transactions between independent trading units should be calculated and managed at the independent trading unit and company-wide level respectively; internal control should be implemented to prevent naked short selling and default in payment.
• Where a securities house processes its own short selling order, the department responsible for monitoring the balance management system should perform a consignee's confirmation procedures by checking the firm's internal control standards.
• The guideline will continue to be updated; English version will be issued in October 2024.

Overview of Customized Support

• SK FSS expanded short selling computerization task force (TF) to joint TF from 9 September 2024, with KRX, SK FIA, Korea Securities Depository, Korea Securities Finance Corporation.
• The TF will designate a relationship manager per major investor, provide customized consulting on establishing internal control and internal balance management system.
• Continue to hold briefings in September-December 2024 to provide information on the improved short selling system, address investors' difficulties in short selling computerization.