SEOUL, May 22 (Reuters) - South Korea has no plan to lift a ban on stock short-selling until it can put a system in place to stop big investment banks engaging in illicit trading practices, Yonhap news reported on Wednesday, citing a presidential official.
"There has been no change in our stance regarding the short selling," an unnamed presidential official was quoted as saying. "Our stance is that it will not resume unless a system is in place" to stop illegal forms of the trading tactic, including naked short selling.
An official at the presidential office confirmed the comments.
The remarks appear to contradict a comment by the governor of the Financial Supervisory Service over the weekend who reportedly indicated the possibility of a partial easing of the ban, which was going to run through the end of June.
Last November, South Korea reimposed a full ban on the practice of selling borrowed shares in the domestic market, after it found illegal trading by two foreign firms in October, and launched a special investigation to look into trading practices at other banks.
Last month, the watchdog prepared a new monitoring mechanism to better detect short-selling breaches in the stock market.
South Korea has said the short-selling ban, imposed through the first half of this year, will stay in place until adequate measures are prepared to prevent illegal trades. (Reporting by Jack Kim and Hyonhee Shin; Editing by Muralikumar Anantharaman, Ed Davies)
