ChainCatcher report: According to Yonhap News, on July 29, Korean exchanges internally assessed the technical feasibility and system requirements for temporarily banning short selling and narrowing price limits (currently at 30%) to address recent sharp market fluctuations. A source familiar with the matter stated that “only technical feasibility has been confirmed,” and this was not a step toward implementation, but rather part of a review of available emergency measures. The Korean stock market has continued to plummet recently, worsening losses for retail investors. At a meeting of the National Assembly’s Policy Committee, multiple lawmakers urged authorities to consider temporarily banning short selling and reviving the Securities Market Stabilization Fund. A public petition calling for a suspension of short selling garnered over 10,000 signatures within two days. However, such a ban conflicts with Korea’s goal of inclusion in the MSCI Developed Markets Index; a previous 17-month short-selling ban from November 2023 to March 2025 led MSCI to downgrade Korea’s market access rating. The exchanges have stated they have not received any official request from the government nor formally discussed implementing a short-selling ban.
Korean Exchange Evaluates Technical Feasibility of Temporary Short-Selling Ban and Price Limit Reduction
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Summary
On July 29, amid market turbulence, the Korean Exchange assessed the technical feasibility of banning short-selling and reducing price limits. Technical indicators were reviewed to evaluate system readiness, but no formal request for action has been made. Exchange operations remain stable, though retail investors are experiencing losses as the market continues to decline. Lawmakers and the public have urged emergency measures, including a short-selling ban and the establishment of a stabilization fund. A previous 17-month ban impacted Korea’s MSCI rating. The exchange confirmed there have been no official discussions regarding a ban.
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