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(Photo = Yonhap news) |
[Alpha Biz= Reporter Paul Lee] Financial authorities have come up with a blueprint for a computer system to block illegal short selling without borrowing. The plan is to first block illegal short selling by identifying the sellable balance of institutional investors, and if they fail to filter it out, they will be caught by the financial authorities' central blocking system (NSDS).
Lee Bok-hyun, director of the Financial Supervisory Service, said, "We expect to eradicate illegal short selling by installing a double verification system."
The Financial Supervisory Service held a "second open discussion with individual investors" at the conference hall of the Korea Exchange along with the Korea Exchange, the Korea Securities Depository and Korea Securities Finance on the 25th and unveiled a plan to establish a computer system to prevent illegal short selling.
Lee Bok-hyun, head of the Financial Supervisory Service, Yang Tae-young, head of the Korea Exchange's Securities Market Division, Lee In-seok, executive director of the Korea Securities Depository, and Park Sang-mook, head of the Korea Securities Finance and Financial Digital Division, attended the discussion as representatives of related agencies. Among the panelists were Lim Gye-hyun, head of NH Investment & Securities' PBS division, and Cha Moon-hyun, vice president of Timepolio Asset Management.
According to the plan to establish a computer system, it is a dual device in which institutional investors and secondary financial authorities filter out naked short selling attempts. First, institutional investors build their own system to computerize the sellable balance. This is a way to aggregate balance fluctuations in real time and block short selling that exceeds the balance. When traders place a selling order in a particular item, they compare the order with the balance with the institutional investor's own system. If the order is higher than the balance, the sale order is made, but if the balance is less than the order, the sale order is automatically rejected.
AlphaBIZ Paul Lee(hoondork1977@alphabiz.co.kr)
