Seoul, May 18 (IANS) South Korea is not mulling ban on short selling of non-financial stocks despite resurfacing concerns over Europe's debt crisis, a senior financial regulator said Friday.
"Ban on short sales is not being mulled at present," Koh Seung-beom, director general of Financial Services Commission (FSC) financial policy bureau, told reporters.
Koh worried that volatilities in the local financial market may strengthen in accordance with developments of the European fiscal crisis, but stressed that the current impact of external factors on the domestic market seemed not big compared with the second half of last year when the global financial market was in turmoil following the downgrade of the US sovereign rating in early August last year, reported Xinhua.
South Korea imposed a ban on short selling in October 2008 when the global financial crisis peaked, but lifted the ban on non-financial stocks in June 2009, before re-imposing such ban on all listed stocks in August 2011.
The financial watchdog lifted its ban on short selling of non-financial stocks in November last year, while maintaining the ban on financial stocks.
Short selling refers to the sale of shares by borrowing them in anticipation of price falls, before repaying the borrowed shares when the prices decrease. The trading practice has been considered as one of the main culprits of plunging stocks prices.
"Ban on short sales is not being mulled at present," Koh Seung-beom, director general of Financial Services Commission (FSC) financial policy bureau, told reporters.
Koh worried that volatilities in the local financial market may strengthen in accordance with developments of the European fiscal crisis, but stressed that the current impact of external factors on the domestic market seemed not big compared with the second half of last year when the global financial market was in turmoil following the downgrade of the US sovereign rating in early August last year, reported Xinhua.
South Korea imposed a ban on short selling in October 2008 when the global financial crisis peaked, but lifted the ban on non-financial stocks in June 2009, before re-imposing such ban on all listed stocks in August 2011.
The financial watchdog lifted its ban on short selling of non-financial stocks in November last year, while maintaining the ban on financial stocks.
Short selling refers to the sale of shares by borrowing them in anticipation of price falls, before repaying the borrowed shares when the prices decrease. The trading practice has been considered as one of the main culprits of plunging stocks prices.
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