S. Korea to tighten rules on stock short selling amid market rout

SEOUL, March 10 (Yonhap) -- South Korea's financial authorities said Tuesday they will tighten regulations on stock short selling as part of market stabilization measures amid increased fluctuations sparked by the outbreak of the new coronavirus and a slide in global oil prices.

Finance Minister Hong Nam-ki said the government will temporarily ease its requirements for the designation of certain shares subject to a possible ban on short selling.

The decision came in a meeting of economy-related ministers and officials held in Seoul.

A finance ministry official later said the enhanced regulations will take effect immediately, with its details to be explained by the Financial Services Commission after the local stock market closes Tuesday.

The move follows heavy losses in the local stock market, believed to have been caused partly by massive short-selling by foreigners and institutions that apparently expect additional drops in local stock prices.

The benchmark Korea Composite Stock Price Index (KOSPI) plunged more than 4 percent Monday to close at a six-month low of 1,954.77.

Foreign investors sold a net 1.3 trillion won (US$1.1 billion) on Monday alone, the highest amount since the Seoul bourse operator began tracking such data in 1999.

U.S. stock market also crashed, with the Dow Jones industrial average plummeting 7.79 percent Monday (local time) in the face of the spread of the coronavirus and a sharp decline in oil prices.
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