South Korea’s stock short-selling ban raises political questions

SEOUL — South Korea’s ban this month on short-selling of stocks has been welcomed by the country’s vocal army of retail investors who claim the practice favors institutional counterparts but criticized by analysts as a government ploy to win their support in national legislative elections next year.

The bombshell from market regulator the Financial Services Commission (FSC) came on Nov. 5, at an unscheduled Sunday briefing when it was announced that there would be a prohibition on short-selling in Seoul stock markets — except for market makers and liquidity providers — from the next day until the end of June 2024 — almost eight months.

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