According to statistics released on Monday, the total amount of short selling of South Korean equities on the first day of the trading scheme’s restart was above 1.7 trillion won ($1.16 billion).

Following the discovery of a slew of naked short selling crimes involving many international investment institutions, the nation temporarily banned short trading in November 2023, according to the Yonhap news agency.

For the first time since March 2020, when authorities prohibited short selling for listed corporations due to a market meltdown brought on by the COVID-19 epidemic, short selling is permitted for all listed firms starting Monday.

The prohibition was reinstated in 2023 after being partly repealed in May 2021.

The Korea Exchange reports that short selling by investors totaled 1.73 trillion won on Monday, with 1.3 trillion won coming from companies listed on the main exchange and 430 billion won from those on the tech-heavy KOSDAQ market.

The figure on Monday represents a significant increase from 772 billion won in short sales on November 3, 2023, the day before the nation outlawed the trading activity.

Ninety percent of the total, or 1.54 trillion won, came from short selling by foreign investors. Short selling by institutional investors totaled 111 billion won.

The tech-heavy KOSDAQ fell 3.01 percent to 672.85 points on Monday, while the benchmark Korea Composite Stock Price Index fell 3 percent to settle at 2,481.12 points.

A new mechanism was created by the bourse operator to identify any illicit activity. New regulations were also created by the nation’s financial regulator, the Financial Supervisory Commission.

The financial watchdog, the Financial Supervisory Service, has said that, for a maximum of two months after the lifting of the prohibition on short sales, it will improve market surveillance and put policies in place to stop excessive volatility of certain stocks.