South Korea’s financial regulator has handed down penalties against several global financial institutions, including JPMorgan, Morgan Stanley, Nomura, and UBS, for breaching short-selling regulations within the nation’s stock market. This was confirmed by the Financial Supervisory Service (FSS) on Thursday.
The fines, described as administrative sanctions, were decided upon by the Securities and Futures Commission on the previous day, insiders from the FSS revealed. Yet, the details remain under wraps pending an official announcement.
Reactions from the implicated firms varied: Nomura expressed unawareness of any regulatory decision, JPMorgan and Morgan Stanley opted out of commenting, and UBS has yet to respond to inquiries.
In South Korea, executing naked short-sales—trading stocks without securing them first or confirming they can be borrowed—runs afoul of the Capital Markets Act. Starting March, the country intends to lift a comprehensive short-selling prohibition instated the prior November, coinciding with the introduction of new mechanisms to identify and curb illicit transactions.
