South Korea's NSDS fails to investigate 74% of reported short selling violations

The National Short Selling Detection System (NSDS), implemented to identify illegal short selling, has failed to initiate investigations into 74% of reported violations within its first 17 months of operation.

Data provided by the Korea Exchange and the Financial Supervisory Service to lawmaker Park Min-gyu reveals that out of 95 suspected cases reported by the exchange, 71 remain uninvestigated. The backlog is particularly severe for cases reported this year, where 97% of notifications have not yet undergone investigation. Of the 10 cases where actions were finalized, only one resulted in a fine, while others were dismissed or exempted.

The Financial Supervisory Service attributed the delay to a critical shortage of personnel, noting that only nine investigators are currently tasked with handling NSDS reports alongside other market monitoring duties and voluntary disclosures.