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Financial Services Commission. (Photo = Financial Services Commission) |
[Alpha Biz= Paul Lee] The South Korean government will implement a new system allowing the suspension of payments from accounts suspected of being involved in illegal short selling or unfair trading practices.
According to the Financial Services Commission (FSC), a revised enforcement decree of the "Financial Investment Services and Capital Markets Act" containing these measures was approved at a cabinet meeting.
The updated decree is set to take effect on April 23, alongside the amended Capital Markets Act.
Under the revised law, the FSC can request financial institutions to suspend payments from accounts suspected of being used for unfair trading activities for up to one year.
If financial institutions fail to comply with the payment suspension request, they may face fines starting at 100 million KRW (approximately $73,000).
Additionally, for cases involving unfair trading or illegal short selling, the FSC will have the authority to restrict the trading of financial investment products for up to five years.
The FSC stated that this reform introduces a variety of non-monetary sanctions similar to those adopted in major overseas markets, and is expected to help establish a sound and fair trading environment.
AlphaBIZ Paul Lee(hoondork1977@alphabiz.co.kr)
