President Yoon Suk Yeol considers illegal stock short sellers as a serious social "malady," his office said Sunday following the financial regulator's decision to ban stock short selling through the first half of next year.
The remarks came as the Financial Services Commission announced the ban on stock short selling, effective starting Monday through the end of June 2024, citing concerns about growing market volatility and the illegal short selling practices undermining market stability.
The commission also decided to inspect all global investment banks for illegal short selling after two Hong Kong-based IBs have been suspected of short selling 56 billion won ($42.7 million) worth of stocks while being aware that they would not be able to borrow the shares sold.
President Yoon is regarding the forces behind illegal stock short selling as a serious social "malady" and the decision to conduct a blanket inspection of all global IBs is an extension of that perception, a presidential official said.
"Yoon believes it is necessary to have an institutional upgrade for prior prevention beyond follow-up punishment in order to protect all stock market investors, including 14 million individual investors," the official noted.
"The government will do its utmost to ensure a fair asset market is established so that investors with good faith do not get harmed," the official said. (Yonhap)