Regulatory Alerts2024-11-21 | 83458FSC Issues Prior Notice of Legislative Changes on Short Sale Regulations
The Financial Services Commission issued a prior notice of legislative changes to the Financial Investment Services and Capital Markets Act, with new short sale regulations set to take effect on March 31, 2025. The proposed rules limit institutional stock borrowing periods to 12 months, mandate electronic net short position management systems to prevent naked short selling, and prohibit short sellers from acquiring convertible bonds and bonds with warrants during specific issuance windows. These measures aim to strengthen internal controls, enhance monitoring through the Korea Exchange, and impose administrative fines for violations while allowing a public comment period until December 31.
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