Published On: Sat, Aug 13th, 2011

Temporary Short-selling Ban on KRX Listed Securities

Financial Services Commission (FSC) of Korea has decided August 10 to temporarily ban short-selling on all securities (excluding debt securities) listed in Korea Exchange (KRX) from Aug. 10th 2011 to November 9th 2011 (for 3 months period). This short-selling ban will be effective on equity shares, ETFs, ELWs, warrants, and beneficiary certificates listed in KOSPI Market and KOSDAQ Market of KRX. However, KRX will maintain bona-fide exception to allow (covered) short-selling on following cases;

i) when the registered Liquidity Provider (LP) of equity shares, ETF, or ELW is short-selling to provided its obligatory quotations;

ii) when the registered ELW LP is short-selling to hedge its LP positions;

iii) when the registered ETF LP is short-selling to hedge its LP positions; and

iv) when the registered Market Maker of KRX Derivatives Market is short-selling to hedge its market making positions.

This regulatory action is also effective on financial shares which were under short-selling ban since Oct. 2008.

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