Securities and Shipping Commission sets a total of 6.05 billion won
Financial authorities imposed fines totaling 6.05 billion won on two foreign financial companies involved in illegal short selling. This is the first case where a fine has been imposed for breaching short selling regulations, which have been dealt with through fines or warning measures.
The Securities and Futures Commission under the Financial Services Commission held a regular meeting on the 8th and announced that it had decided to impose fines of 2.18 billion won and 3.87 billion won, respectively, on the short selling of foreign financial companies A and without borrow them. B. This is the first application since the penalty for breaching short selling regulations was strengthened from an administrative fine to a fine in accordance with the review of the Capital Markets Act (enacted in April 2021).
According to the Securities and Exchange Commission, Company A violated regulations on unleveraged short selling by submitting a sell order for 210,744 shares (25.14 billion won) that it does not hold. Company A was found to have mistakenly placed an order for stocks that could be sold after stock items scheduled to be issued as a bonus were stored in the internal system in advance to evaluate the value of the fund. Company B also violated short selling regulations by submitting a sell order for 27,374 shares (7.329 billion won) that it did not own by mistaking the name of the stock. In our stock market, short selling itself is legal, but short selling without leverage, which is selling non-existent stocks, is classified as illegal short selling.
The Financial Services Commission announced that it would continue to take tough measures against breaking short selling rules. In particular, it was explained that carelessness or negligence on the part of financial institutions alone could lead to significant fines depending on the scale of the offences, so special care must be taken.
Reporter Song Soo-yeon
