The financial authorities will impose a temporary restriction on short selling beginning next month.
The Financial Services Commission (FSC) said it will suspend the practice on some stocks traded on the main bourse and the Kosdaq market for 10 days, effective Oct. 13.
The move comes after FSC Chairman Jun Kwang-woo said that the regulator will consider beefing up the rules on short selling if necessary, following a breach of the rules on by a number of securities companies.
``The regulator plans to pursue disciplinary actions against the securities firms in question,'' Song Kyung-chul, deputy governor of the Financial Supervisory Service. ``Supervision on short selling will be strengthened to minimize any negative impact on the market.''
This is aligned with global regulators who have put a temporary ban on short selling. The U.S. Securities and Exchange Commission banned short selling for 10 days after Britain imposed a four-month curb on short selling of financial stocks, as part of efforts to calm the global financial turmoil.