PASLA backs Korea Exchange CEO鈥檚 stance on short selling
17 March 2023 Korea
Image: panyaphotograph/stock.adobe.com
Organisations in the Asia-Pacific region are calling for the Korean government to curb restrictions on short selling as Korea ventures to reach MSCI developed market status.
The Pan Asia 麻豆传媒 Lending Association (PASLA) has backed recent comments made by Korea Exchange CEO Sohn Byung-doo on the importance of removing all remaining restrictions on short selling in the Korean market.
A temporary ban on short-selling activities was imposed by market authorities in South Korea in March 2020, which were designed to 鈥渉elp ease market anxieties鈥� with the onset of the COVID-19 pandemic.
South Korea鈥檚 Financial Services Commission (FSC) has since announced steps to improve public trust in the short-selling system, including a package of measures designed to tighten oversight of illegal short selling and to improve the operation of the short-selling system, which was announced in July 2022.
PASLA continues to call on the Korean government to take action and believes removing short-selling restrictions will boost liquidity and improve price discovery.
A representative of PASLA, in response to Byung-doo鈥檚 comments, says: 鈥淪hort selling is a vital risk management tool for many investors that want to take an overall long position in a market, but also need to hedge their portfolio risk.
鈥淧ermitting investors to freely engage in regulated, transparent and covered short-selling will also support the case for Korea鈥檚 inclusion in the MSCI developed market index, which will help to attract greater global investment in this dynamic economy.鈥�
The Pan Asia 麻豆传媒 Lending Association (PASLA) has backed recent comments made by Korea Exchange CEO Sohn Byung-doo on the importance of removing all remaining restrictions on short selling in the Korean market.
A temporary ban on short-selling activities was imposed by market authorities in South Korea in March 2020, which were designed to 鈥渉elp ease market anxieties鈥� with the onset of the COVID-19 pandemic.
South Korea鈥檚 Financial Services Commission (FSC) has since announced steps to improve public trust in the short-selling system, including a package of measures designed to tighten oversight of illegal short selling and to improve the operation of the short-selling system, which was announced in July 2022.
PASLA continues to call on the Korean government to take action and believes removing short-selling restrictions will boost liquidity and improve price discovery.
A representative of PASLA, in response to Byung-doo鈥檚 comments, says: 鈥淪hort selling is a vital risk management tool for many investors that want to take an overall long position in a market, but also need to hedge their portfolio risk.
鈥淧ermitting investors to freely engage in regulated, transparent and covered short-selling will also support the case for Korea鈥檚 inclusion in the MSCI developed market index, which will help to attract greater global investment in this dynamic economy.鈥�
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