South Korea to impose fines on two Global Investment Banks for Illegal Short-Selling

The Financial Services Commission (FSC) is cracking down on illegal short-selling activities in the local stock market, with plans to penalize two global investment banks for conducting naked short-selling transactions.

South Korea's financial regulator has announced its plans to impose penalties on two global investment banks that it is currently investigating. The Financial Services Commission (FSC) revealed that it had uncovered evidence of naked short-selling transactions being conducted by these banks, a practice that involves selling shares without first borrowing them. While the names of the banks involved were not disclosed, the FSC's move is part of a broader effort to crack down on illegal short-selling activities in the local stock market. This initiative comes in the wake of South Korea's decision to implement a full ban on short-selling until June 2024.

South Korea to impose fines on two Global Investment Banks for Illegal Short-Selling

In December, the FSC had already announced its intention to fine two global investment banks and one local brokerage a total of 26.5 billion won ($20.2 million) for engaging in naked short-selling. The regulator's ongoing efforts to hold financial institutions accountable for such practices demonstrate its commitment to maintaining the integrity of the country's financial markets.

South Korea's financial regulator's proactive stance against illegal short-selling activities sends a strong message to global investment banks and local brokerages that it will not tolerate any violations of market regulations. By imposing penalties on those found to be engaging in naked short-selling, the FSC is taking decisive action to safeguard the stability and fairness of the stock market.