S Korea – KRX Short Selling Revisions

S Korea – KRX Short Selling Revisions

On 22 August 2022, KRX issued plans to update rules re short selling issues.

  • KRX published notice of its intention to revise the enforcement rules for its securities markets to strengthen designation system for stocks under overheated short selling.
  • Changes to be made as follow-up to recent new detection and punishment measures.
  • Follows SK FSC July 2022 issued new illegal short selling measures.


  • Type 4 to be added to the criteria for overheated short selling stock detection system.
  • New criteria covers short selling proportion of 30% or more, stock price decrease of -3% or more, or where increase rate of short selling trading value is double or higher.
  • KRX estimates the new criteria will increase the number of designated overheated short selling stocks to 785 from 690 in a year, rise of 95 cases, equals further 13.8%.
  • KRX also notes that it wishes to impose an extended prohibition period of short selling.
  • If stock price decreases 5% or more on prohibition day or on extended prohibition day of short sale, the period of short selling prohibition is extended to next trading day.


  • After revising the relevant rules and issuing an advance notice in August 2022, KRX will implement new short selling issue designation system asap after IT system update.