Updated December 20th, 2023 at 18:18 IST
South Korea penalise three global hedge funds
South Korea had previously announced on November 5 its temporary prohibition on stock short-selling until June 2024.
South Korean regulatory authorities announced fines amounting to 2 billion won ($1.54 million) imposed on three international hedge funds for purportedly engaging in unfair stock transactions. The Financial Services Commission (FSC) stated that these funds are alleged to have contravened South Korea's capital markets regulations by participating in activities such as naked short selling.
While specific details regarding the identities of the implicated hedge funds were not disclosed by the authorities, the FSC indicated its intention to refer the matter to prosecutors for further investigation.
This recent regulatory action comes on the heels of the government's earlier decision in March, where penalties were levied against two global entities for engaging in naked short selling within the domestic stock market, marking the inaugural application of updated regulatory protocols.
Furthermore, South Korea had previously announced on November 5 its temporary prohibition on stock short-selling until June 2024. This regulatory move has elicited varied responses, with some critics arguing that it could potentially diminish market transparency and liquidity.
The timing of this decision coincides with South Korea's efforts to persuade MSCI to elevate its market classification from an emerging to developed status in the upcoming annual market review.
(With Reuters inputs)
Published December 20th, 2023 at 18:18 IST