South Korea now speaks on the impact of illegal short selling after the illicit practice accounted for 20% of daily transactions.
Financial watchdogs have vowed to continue rooting out the malpractice in the markets.
“The FSS found that the violation rate exceeded 20% in some cases, which suggests that illegal transactions have a big impact on a certain stock,” the financial regulator said in a statement late Tuesday.
“It’s necessary to consider the impact of illegal short sales on an individual stock as such trades hinder fair pricing and increase short-term volatility,” it said.
Bloomberg reports the South Korea’s financial watchdogs derived the 20% figure by dividing the amount of violated orders on a certain stock by its daily trading value.
The FSS did not identify the equities that saw illegal trades and declined to say how frequently the trades exceeded that ratio.
In November, South Korea imposed a ban on short selling through mid-2024, a decision that drew big celebration from retail investors in the country.
Professional investors on the other hand are skeptical, seeing the move as being politically motivated ahead of the election.
Financial authorities have defended the decision, describing illegal trades such as naked short selling — an act of selling shares without borrowing them first — as “rampant” and hurting fairness in the market, reports Bloomberg.
Furthermore, Bloomberg reported on Monday that investigators have turned up just 110 billion won worth ($83 million) of alleged naked short selling by four global investment banks.
In the U.S., naked short selling continues to be a big problem.
Citadel Securities is currently under heavy scrutiny for marking short sales as long sales over a period of five years.
Investors in the AMC, MULN, GTII, FNGR, and MMTLP communities are just a few of many who have been raising awareness of the malpractice happening in the U.S stock market.
Also Read: SEC Commissioner Now Says Securities Lending Facilitates Illegal Trading
The Power of Community and Raising Awareness
Market News Published Daily 📰
Don’t forget to opt-in for push notifications so you don’t miss a single article!
Also, thank you to all of our blog sponsors.
This year we’ve been able to increase push notifications slots making it more convenient than ever for new readers to receive their daily market news and updates.
Scroll below to view my stock purchases this month!
You can also follow me on X (Twitter), Instagram, Facebook, or LinkedIn for daily news and updates on your favorite stories.
Frank Nez’s Stock Portfolio
Wondering which stocks Frank Nez is holding? Which stocks is Frank Nez buying?
Frank Nez is now sharing his exclusive and personal stock portfolio with readers, only on the Patreon.
11/16/2023 – Today I invested $1,000 in two different stocks for a brand new stock dividend portfolio I am creating for 2024.
Recommended For You ✨
About The Author
Leave your thoughts below.
For more news and updates like this, opt-in for push notifications, or join the popup newsletter.
You can also follow me on social media.
Twitter: https://twitter.com/FNez_Blogger
Instagram: https://www.instagram.com/iamfranknez/