Global: South Korea Penalizes JPMorgan, Morgan Stanley, Nomura, and UBS for Short-Selling Violations

South Korea’s Financial Supervisory Service (FSS) has imposed fines on JPMorgan, Morgan Stanley, Nomura, and UBS for breaching short-selling regulations in the domestic stock market. The country’s market watchdog confirmed the penalties on Thursday, following a review by the Securities and Futures Commission (SFC).

An official from the FSS stated, “We have concluded administrative sanctions, meaning imposing fines.” However, further details were withheld as the decision has not yet been officially disclosed.

In response, JPMorgan and Morgan Stanley declined to comment, while UBS and Nomura stated they were unaware of any regulatory decisions at this time.

Under South Korea’s Capital Markets Act, naked short-selling—where stocks are sold without being borrowed or confirmed for borrowing—is strictly prohibited. The regulatory action highlights the country’s commitment to enforcing market integrity and preventing manipulative trading practices.

South Korea had implemented a temporary market-wide ban on short-selling in November 2023 to curb market volatility. However, authorities plan to lift the restriction by March 2025, coinciding with the introduction of a more advanced monitoring system to detect and prevent illegal trading activities.