Seoul: The chief of South Korea's financial watchdog has highlighted the need to expand the scope of stock short selling to include more stocks, as the country plans to resume the practice next month. This comes after a temporary ban was imposed in November 2023 due to uncovered violations of naked short selling involving several global investment banks.

According to Yonhap News Agency, FSS chief Lee Bok-hyun expressed his personal view at a conference, stating that resuming short selling on a wider range of stocks is essential for winning market confidence. Prior to the ban, 350 listed firms, specifically the constituents of the KOSPI 200 index and the KOSDAQ 150 index, were subject to short selling.

Lee emphasized a commitment to implementing measures focused on fairness and transparency in the capital market to enhance market confidence. He noted that the computerization of the short selling system, alongside the launch of a secondary stock market exchange, is expected to bolster investor confidence.

Lee also mentioned that efforts will be directed towards establishing a transparent and fair paradigm for the capital market. The upcoming launch of an alternative trading system next month aims to increase efficiency and convenience in securities trading, signaling a significant change in the country's stock market.

Currently, the Korea Exchange (KRX) is the sole national operator of the stock market since its inception in 1956. The new secondary stock trading platform, Nextrade (NXT), will operate from 8:00 a.m. to 8:00 p.m., offering extended hours compared to the main bourse's 9:00 a.m. to 3:30 p.m. schedule. Additionally, NXT will provide lower fees and different stock bid and ask prices.

The FSS chief assured that authorities would persist in their efforts to protect investors.