Korea lifts short selling ban on non-financials
15 November 2011 Seoul
Image: Shutterstock
The Korean financial regulator has lifted a three-month ban on short selling of nonfinancial stocks while maintaining the ban on financial stocks "for a while".
The Financial Services Commission (FSC) said that the easing of restrictions was because stock market volatility has been considerably subdued since market turmoil in the summer.
However, given that potential Eurozone risks still remain such as a possibility of Greek default, growing concerns about Italy’s debt crisis, and upcoming maturity dates of sovereign debt for Portugal, Ireland, Italy, Greece and Spain, the short-selling ban on financial stocks will remain, the FSC noted.
In August, Greece, Italy, France, Spain and Belgium also banned short sales; however, Greece is the only country that banned short selling of all listed stocks as Korea did. The remaining four countries imposed short-selling bans on a few number of financial stocks.
The Financial Services Commission (FSC) said that the easing of restrictions was because stock market volatility has been considerably subdued since market turmoil in the summer.
However, given that potential Eurozone risks still remain such as a possibility of Greek default, growing concerns about Italy’s debt crisis, and upcoming maturity dates of sovereign debt for Portugal, Ireland, Italy, Greece and Spain, the short-selling ban on financial stocks will remain, the FSC noted.
In August, Greece, Italy, France, Spain and Belgium also banned short sales; however, Greece is the only country that banned short selling of all listed stocks as Korea did. The remaining four countries imposed short-selling bans on a few number of financial stocks.
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