Korean regulators visit Hong Kong to discuss short-selling monitoring 

South Korean reps met with investment banks and the CEO of SFC Hong Kong.

South Korea’s financial regulator has made a two-day visit in Hong Kong to discuss improvements to its short-selling management following a scandal involving equity-linked securities (ELS)

In March 2024, 11 financial institutions in South Korea were found to be violating rules on offering ELS products tied to Hong Kong’s benchmark index.

On May 17, The Financial Supervisory Service (FSS) delegation met with the CEO of the Securities and Futures Commission of Hong Kong to give details on the short selling scheme, as well as to discuss improvements in developing a monitoring system.

The two entities reportedly agreed to strengthen cooperation and collaboration in relevant system improvement and investigations on naked short selling, the FSS said in a press release posted on its official website.

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A day earlier, on May 16, the FSS met with seven global investment banks and securities industry associations in Asia to discuss its planned system improvements.

Participating global IBs reportedly shared opinions about Korea’s capital market environment for investment and global capital flows, making suggestions on the capital market development.

The global banks’ representatives also reportedly voiced their agreement with the policy direction for the short selling monitoring system, asking for the authorities’ effort to combat uncertainty over short selling regulations.