The President of South Korea now combats illegal trading head on as his office seeks to further strengthen prosecution.
The Capital Markets Act, aimed at enhancing sanctions and penalties for illegal short selling, has been officially enacted and will come into effect in March of next year.
President Yoon Suk-yeol has called on financial authorities to prepare thoroughly for this implementation and reiterated his stance on abolishing the financial investment income tax to stimulate the capital market, according to KBS News.
Last November, the government imposed a complete ban on short selling, driven by concerns that illegal naked short selling was undermining trust in the capital market.
In fact, financial authorities revealed in May that over 200 billion won in illegal short selling had been identified involving nine global investment banks.
The National Assembly approved amendments to the Capital Markets Act to prevent such activities on the 26th of last month, and it was promulgated during a Cabinet meeting today (October 15).
A significant aspect of the new legislation is the mandatory establishment of an electronic system for short selling.
Violators will face fines, even in the absence of illegal short selling.
The Act also significantly increases sanctions and penalties to deter repeated instances of unfair trading and illegal short selling.
The government is preparing follow-up actions, including the development of presidential decrees, ahead of the Act’s implementation at the end of March.
President Yoon Suk-yeol stated: “We will address the imbalance between individual and institutional investors, significantly enhancing penalties against illegal short selling and unfair trading.”
Additionally, President Yoon urged the National Assembly to eliminate the financial investment income tax, expressing confidence in the government’s financial policies.
He highlighted Korea’s recent inclusion in the World Government Bond Index as an international acknowledgment of the government’s direction.
President Yoon Suk-yeol added: “We will tackle the Korea discount, improve the status of our capital market, and attract more investment.”
In a separate initiative, President Yoon also promised to expedite the designation of a tertiary general hospital in Jeju Island to enhance living conditions, during the first public discussion on livelihood issues held there.
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Also Read: Illegal Short Sellers Will Now Face Life Sentence In Prison
More on South Korea Markets
- South Korea Now Finds Banks Pursued Illegal Shorting Scheme
- South Korea Now Speaks on Impact of Illegal Short Selling
- Korean Regulators Now Impose Billions In Fines For Illegal Trading
- Citadel High Frequency Trading: Fined by Korea’s Regulators
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