Starting on the 31st, financial firms such as JP Morgan and Goldman Sachs will begin short selling. These corporations have met the criteria for preventing naked short selling and have passed the reviews of the Financial Supervisory Service and the Korea Exchange.
On the 30th, the Korea Exchange announced that in preparation for the full resumption of short selling, it has established a balance management system within institutions according to the revised Capital Markets Act, confirming that 107 firms have been deemed appropriate by investment brokers.
Among these, 21 firms have adopted computerized methods for short selling. This list includes foreign investment banks such as JP Morgan, Goldman Sachs, Merrill Lynch, Morgan Stanley, Barclays Capital, and Jefferies. Eight domestic comprehensive financial investment companies, five general securities firms, and two asset management companies are also included.
Eighty-six firms have adopted pre-deposit methods, placing short selling orders after depositing borrowed securities into their accounts. These pre-deposit firms have also been confirmed for the appropriateness of the internal control standards for short selling by the securities firms responsible for their short selling orders.
Starting on the 31st, the Korea Exchange will launch the short selling central inspection system (NSDS). The NSDS is a system that continuously monitors the selling orders of short selling firms through a time-based balance calculation function and immediately detects illegal short selling by placing orders without borrowing.
The Korea Exchange noted that to support the continued expansion of computerized short selling, it will operate monthly linkage tests and simulated markets even after April, stating, "Strict reviews will determine whether institutional investors meet the qualification requirements."