KOREAN REPUBLIC: KRX Implements Amendments to Overheated Short Selling Rules

Friday September 22 2017

On 22^nd September 2017, Korea Exchange (KRX) published a notice on the updated overheated short-selling rules and systems. The updated rules will enter into force from 25^th  September 2017.

Key changes include amendments to the criteria for designating overheated short-selling issues in order to designate such issues in a timely manner, and prohibiting short-selling of the detected issues on the following day as is the case with the existing rules.

Amendments to the criteria provide that an issue will be designated as an overheated short-selling issue if it meets all of the following three conditions:

• short-selling ratio 20% or higher
• price falling rate 5% or higher
• increase rate of short-selling ratio two folds or more

Additionally, an issue will be designated as an overheated short-selling issue if it meets any of the two conditions below:

(i) Short-selling ratio 18% or higher* + price falling rate from 5% to under 10% + increase rate of short-selling transaction value six folds or more.

(ii) Price falling rate 10% or higher + increase rate of short-selling transaction value six folds or more.

Click here for the lists of overheated short-selling issues.

Click on the link above for further information.