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A plan to disclose the real names of foreign financial investors in case of illegal short selling will be implemented from February this year.
The Financial Services Commission (FSC) announced in early December last year that, from February this year, the Securities and Futures Commission (SFC) will disclose the names of the corporations and details of the sanctions for violating regulations such as short selling and market disruption.
Those subject to disclosure include corporations and individuals who receive fines or penalties from the 22nd Securities and Futures Commission which was initiated last month. In the past, only domestic investors and domestic corporations were disclosed.
According to a member of the National Assembly’s Political Affairs Committee, 127 cases of illegal short selling have been detected since the enforcement of the Capital Market Act. The lawmaker pointed out that “domestic securities companies disclose through business reports in case of illegal short selling, but it is not applied to foreigners.”
Another lawmaker said that 93% of non-leveraged short selling was carried out by foreigners, but there was not a single case of criminal punishment, and in 56 cases out of 127 cases, only ‘caution’ measures were taken, not even fines.
The chairman of the FSC also agreed with the above problem, saying, “It is true that there are a large number of foreigners in the proportion of short selling, and it is true that the number of cases caught is also high.”
Some speculate that the financial authorities’ action is an attempt to pave a way for the incorporation of Morgan Stanley Capital International (MSCI) advanced index.
A source from the industry predicted, “although the implementation of the ‘foreigner’s real name system’ will not have a significant impact on the market, it is expected to contribute to the recovery of individual investor’s confidence.”
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