South Korea threatens jail terms for breaking stock market rules

Stronger penalties brought in against practice of 'naked' short selling

20201210 Kospi

Dealers at Hana Bank in Seoul on Dec. 11. The Kospi index has powered ahead this year. © EPA/Jiji

KIM JAEWON, Nikkei staff writer

SEOUL -- South Korea's financial regulator has revealed plans to impose jail sentences on some short selling on the country's stock market, saying current financial penalties are too weak to stop the practice.

The move to strengthen curbs on so-called "naked" short selling comes after months during which all short selling has been banned in South Korea. The measure was imposed when the market was sliding in the early days of the coronavirus pandemic.

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