Seoul vows zero-tolerance measures against unfair stock trading

For short selling violations, the regulators will impose fines of up to 100% of the order amount

The Korea Exchange in Seoul
The Korea Exchange in Seoul
Yeonhee Kim 1
2025-07-09 16:56:40 yhkim@hankyung.com
Regulations

South Korea’s top financial regulators and its stock exchange operator will launch a joint task force to strengthen oversight of unlawful financial transactions, while streamlining the delisting process of non-viable companies, according to their joint statement on Wednesday.

The country’s regulatory framework for tackling unfair financial trading is currently fragmented across the Financial Services Commission (FSC), Financial Supervisory Service (FSS) and Korea Exchange (KRX).

Such a division of responsibilities has led to jurisdictional gaps and delays in regulatory action.

The FSC, a financial watchdog agency, sets financial policies and makes rules, while the FSS supervises financial institutions.

"We will actively utilize administrative sanctions, including payment suspensions, fines, restrictions on financial investment product trading and objections to certain executive appointments," they said in the statement.

The regulators will apply AI technology to crack down on illegal trading activities, particularly those that exploit social media or false media reports.

HIGHEST-LEVEL PENALTIES AGAINST ILLEGAL SHORT SALES


In cases where controlling shareholders or company executives are involved in serious market misconduct, the regulators will disclose their identities to prevent similar harm.

"For serious short selling violations, we will impose the highest level of penalties, including fines of up to 100% of the order amount, along with business suspensions and restrictions on trading financial investment products,” it said.

To remove non-viable companies from the stock market in a timely manner, they will also streamline the delisting process by cutting red tape.

Write to Yeonhee Kim at yhkim@hankyung.com
#FinancialSupervisoryService #KoreaExchange #stockpricemanipulation #stockmarketmonitoring #capitalmarketmonitoring #regulations #Korearegulations #FinancialServicesCommission

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