Retail investors in South Korea pointed to the U.S GameStop saga to tell the local regulators to extend the nation’s ban on short-selling stocks. However, the ban has been extended as of now. In 2020, the Korean stock exchange was among the leading 20 in the world as per market capitalization.
The ban has been extended on short-selling, where investors bet that a stock will decline in value till May 2, South Korea’s Financial Services Commission declared on Wednesday. Also, South Korea’s ban is the world’s most significant restriction on short sales, as per Bloomberg.
Financial regulators in South Korea at first positioned a local ban on short sales in March 2020 alongside different nations like Spain, France, Belgium, Malaysia, and Thailand. Economies around the globe chose to control short-selling as the COVID-19 pandemic started destabilizing markets. While most nations immediately lifted the bans, South Korea chose in August 2020 to expand, yet just until March 2021.
On Wednesday, Eun Sung-soo, Chairman of South Korea’s Financial Services Commission held a press conference, reporting that the ban was not only extended but will be partially lifted after May 2. The ban will in any case stay on more than 2,000 stocks.
Although nearby financial investors may have invited the brief extension, this view isn’t shared by organizations around the globe. On January 27, the International Monetary Fund (IMF) encouraged the nation to lift the ban, since the business sectors had balanced out.
As per local media, on Wednesday, the Financial Times Stock Exchange (FTSE) purportedly sent a letter to controllers in South Korea to notice them that it could renounce the country’s order as a developed country in the FTSE Equity Country Classification record should the ban stay set up. To qualify as a developed country, its value market should allow short sales.
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