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Updated January 14th, 2024 at 14:35 IST

South Korea to impose fines on global banks over illicit naked short-selling practices

FSC intensifies global scrutiny to eliminate illegal short-selling, as South Korea enforces a complete ban until June 2024.

Business Desk
Short-selling penalties
Short-selling penalties | Image:Freepik
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Short-selling penalties: South Korea's financial regulatory authority announced on Sunday its plan to levy fines on two undisclosed international investment banks as part of an ongoing investigation. The Financial Services Commission (FSC) revealed that these banks were involved in the illicit practice of naked short-selling transactions, where shares are sold without proper borrowing. 

The FSC, while not disclosing the identities of the banks, has been actively broadening its scrutiny of global investment institutions to eradicate illegal short-selling activities from the domestic stock market. In a move to curb such practices, South Korea has implemented a complete ban on short-selling from November until the end of June 2024. In a related development from December, the FSC had previously stated its intent to impose fines totalling 26.5 billion won ($20.2 million) on two international investment banks and one local brokerage for engaging in naked short-selling.

(With Reuters Inputs)

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Published January 14th, 2024 at 14:35 IST

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