Korea short-selling ban leaves dealers reeling
Korean regulators unveiled a three-month short-selling ban in a bid to calm equity markets following a 17% fall in the Kospi since the start of this month. The prohibition went live on August 10, forcing major dealers to unload excess stock inventory at unfavourable prices
South Korea's Financial Services Commission (FSC) implemented a stock short-selling ban yesterday on all listed stocks traded in the country. The move was aimed at calming volatile and anxious equity markets but also forced major dealers holding stock inventories to jettison their surplus of positions, resulting in substantial losses.
The action by the Korean authorities followed pandemonium in world markets this week after US sovereign debt was downgraded to AA+ from AAA by rating agency
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