South Korean regulators may consider implementing a short selling ban to address the stock market slump.

According to Yonhap News Agency, South Korea’s Korea Exchange (KRX) has recently examined the technical feasibility of temporary short-selling bans and narrowing stock price fluctuation limits to assess emergency measures deployable during sharp market downturns. The checks cover whether systems can execute these adjustments and the time required to complete them. However, a source familiar with the matter emphasized that while technical feasibility has been confirmed, this is not premised on actual implementation. The KRX is also evaluating further reducing the current 30% daily price fluctuation limit to curb single-stock daily declines during extreme market conditions. South Korea’s Ministry of Economy and Finance previously held an emergency meeting to review market conditions, stating that given the KOSPI’s volatility is higher than that of other countries and historical levels, it will maintain the highest alert level and launch a 24-hour joint monitoring mechanism involving relevant departments. Amid the continuous plunge of South Korea’s stock market, a temporary short-selling ban has become one of the main demands of retail investors. A related National Assembly petition gained around 10,000 signatures within two days of going public, with some lawmakers also proposing to reactivate the securities market stabilization fund. Securities analysts in South Korea noted that with the deleveraging of single-stock leveraged ETFs still ongoing, a short-selling ban could help control further declines. However, such a ban may conflict with South Korea’s goal of being included in the MSCI Developed Markets Index. KRX officials stated that they have not received any relevant government requests, nor have they formally studied a short-selling ban, adding that this measure is not within the exchange’s discretionary authority.