Is short selling allowed in Korea?

The FSCMA prohibits naked short selling, i.e., selling listed securities you do not own, and allows only covered short selling, settled with borrowed securities, when it follows the methods prescribed by law.

Short sale orders must be marked separately from ordinary sell orders and may not be placed at or below the last price, and net short positions above a certain level must be reported and disclosed. The Financial Services Commission can restrict covered short selling to stabilize the market, so check announcements by the Financial Services Commission and the exchange for the current scope of what is permitted.