On the 31st, ahead of the resumption of short selling, the Korea Exchange held a demonstration of the short selling electronic system.
On the 19th, the Korea Exchange demonstrated the process of identifying illegal short selling by inputting simulated data into the Short Selling Central Inspection System (NSDS) at its headquarters in Yeouido, Seoul. Short selling is an investment technique where an order to sell is placed by borrowing shares from others, and is illegal without the prior borrowing process.
NSDS is a system designed according to the short selling reform plan established in June of last year and is set to operate for the first time on the 31st in conjunction with the resumption of short selling. NSDS serves as a central blocking system that aggregates balance changes for all institutional investors. It identifies discrepancies by linking the institution's own balance management system with the Korea Exchange's KRX trading system.
This demonstration was organized to finalize the report on the construction status of the short selling electronic system and to regain individual investors' trust in short selling.
On this day, Lee Bok-hyun, head of the Financial Supervisory Service, said, "I appreciate the domestic and foreign securities firms that actively cooperated for the world's first implementation of short selling electrification," adding, "We will make our best efforts to leap to a global advanced market by protecting shareholder interests and improving foreign investment accessibility."
Jeong Eun-bo, the head of the Korea Exchange, stated, "I hope this demonstration becomes a meaningful occasion to dispel concerns surrounding illegal short selling," and added, "I will do my best for stable operations through sophisticated market monitoring."